A spe­cial agent on your side

SHOULD I USE A HOME BUYER’S AGENT?

Herald Sun - Property - - FRONT PAGE -

CARO­LINE JAMES

NHow many buyer’s agents are there? A: There are about 50 ac­cred­ited buyer’s agents in Vic­to­ria, ac­cord­ing to the Real Es­tate Buyer’s Agents As­so­ci­a­tion. In 2001, there were three.

‘‘It is true there are more peo­ple rep­re­sent­ing them­selves as buyer’s agents in 2013 than there were 10 years ago,’’ Brad Straugh­air, of Do­main Prop­erty Ad­vo­cates, said.

‘‘It is the way buy­ing real es­tate is mov­ing, as more time-poor buy­ers out­source as­pects of their lives to pro­fes­sional ser­vice providers, in­clud­ing choos­ing and buy­ing a home.’’

What does a buyer’s agent ac­tu­ally do? A: A buyer’s agent, also known as a buyer’s ad­vo­cate, searches for properties based on a client’s cri­te­ria. They at­tend in­spec­tions and auc­tions on be­half of their buyer. They have ac­cess to home sale re­sults un­avail­able to the pub­lic, which al­lows them to find com­pa­ra­ble sales and de­ter­mine the true mar­ket value of a prospec­tive home, which un­der­pins their ne­go­ti­a­tions with ven­dors.

They should have a good un­der­stand­ing of build­ing re­ports and be able to li­aise with solic­i­tors and mort­gage bro­kers on be­half of clients, REBAA pres­i­dent By­ron Rose said.

Why use a buyer’s agent? A: Po­ten­tial perks in­clude avoid­ing properties that are un­suit­able, hav­ing ac­cess to sales data, in-depth mar­ket O hag­gling with sales agents or en­dur­ing the crush of Satur­day morn­ing in­spec­tions — and lower home prices to boot.

Buyer’s agents pose a pretty com­pelling case. But what ex­actly do they do?

Still too much like ‘‘se­cret’’ agents to many home buy­ers, we put BAs un­der the mi­cro­scope.

How do you se­lect one? A: Care­fully. Ac­cord­ing to peak body the REBAA, ques­tions to ask in­clude: HOW ex­pe­ri­enced are they? WHAT qual­i­fi­ca­tions do they have? WHAT is their most re­cent pur­chase? CAN they pro­vide re­cent client tes­ti­mo­ni­als/ref­er­ences? DO they own prop­erty them­selves? ARE they ac­cred­ited with the REBAA and/or REIV? WHO pays their com­mis­sion?

‘‘Lots of agents use the name ‘buyer’s agent’ when they are re­ally sell­ing off-the-plan properties of de­vel­op­ers and get­ting com­mis­sion from it; ef­fec­tively get­ting paid twice, so def­i­nitely ask who pays com­mis­sions,’’ Mr Straugh­air said.

How much does an agent cost? A: The buyer usu­ally pays a SAVE time in­spect­ing un­suit­able homes AC­CESS to com­pre­hen­sive sale price in­for­ma­tion NO stress deal­ing with sales agents USU­ALLY pay at or be­low mar­ket price knowl­edge, and the fact you will have a crack ne­go­tia­tor on your side when deal-mak­ing.

‘‘A good buyer agent will save you time and money, not just by ne­go­ti­at­ing a fair price at the time of pur­chase but also by iden­ti­fy­ing properties more likely to grow in value over time,’’ Mr Straugh­air said.

‘‘It can mean the dif­fer­ence be­tween buy­ing a home that earns 7-12 per cent cap­i­tal value growth ev­ery year over an­other prop­erty in the same sub­urb with vir­tu­ally the same fea­tures that only grows by 3-4 per cent each year, sim­ply be­cause it is in a fun­da­men­tally less de­sir­able lo­ca­tion.

‘‘Buyer’s agents can of­ten have that de­gree of lo­cal mar­ket knowl­edge.’’ TAP ex­pert knowl­edge of the real es­tate game NO guar­an­tee suit­able homes will be found UP-FRONT fees of­ten paid be­fore search be­gins MISS the thrills of deal-mak­ing per­cent­age of the pur­chase price, typ­i­cally 1.5 to 3 per cent plus GST, de­pend­ing on the chal­lenge of the brief.

Some agents ne­go­ti­ate a set fee in ad­vance and many de­mand an up­front fee to cover pre-pur­chase costs, in­clud­ing prop­erty searches, petrol and time spent in­spect­ing homes.

If you want to do the home hunt­ing your­self you can en­gage a buyer’s agent for ne­go­ti­a­tions only and they will act as your rep in all deal­crunch­ing, usu­ally for a fixed fee or one per cent plus GST of the fi­nal pur­chase price, the REBAA states.

If you want to hire a BA purely to bid at auc­tion, fees vary from $500 to $1000 for each auc­tion they at­tend.

How do you know who is rep­utable? A: Buyer’s agents should be li­censed real es­tate agents, just like sell­ing agents, Real Es­tate In­sti­tute of Vic­to­ria spokesman Robert Larocca said.

‘‘Con­sumers need to en­sure that . . . they have an es­tate agent’s li­cence if they are sourc­ing and ne­go­ti­at­ing on a pur­chase,’’ Mr Larocca said.

The buyer’s agent should also have pro­fes­sional in­dem­nity in­sur­ance.

Their in­dus­try is heav­ily reg­u­lated, Mr Rose said. For a com­plete list, visit reia.com.au.

Are there any pit­falls? Some buy­ers will find up-front fees steep on top of sav­ing for a de­posit and stamp duty. And just be­cause an agent is hunt­ing for your dream home (at a dream price), it doesn’t mean it won’t still take months.

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