Are you thinking of using the services of a Melbourne buyers agent but have no clue how much the agent costs? You have come to the right place. An agent’s fees vary depending on the service they offer and the pricing model they use. Some use the fixed-rate pricing model. Some use a Tiered pricing model and others opt for a commission. What are these models? What services do agents offer? How much do they typically charge in Australia? And what are the fees of a buyers agent or a buyers agency in Melbourne? We will look into these critical questions in detail.
Let’s begin with the different pricing models.
Types Of Buyers Agent Pricing Models
Australian agents, including Melbourne buyers agents, use one of the three pricing models to calculate their fees. They are:
- Fixed Rate Pricing Model
- Commission Or Percentage Model
- Tiered Model
Fixed Rate Pricing Model
In a fixed-rate pricing model, the agents quote a flat fee to the buyers. The advantage of such a model is that you get to know the fees of the agent beforehand and not after the property deal is made.
The price, they fix, depends on the service you ask for. Agents offer three kinds of services. One is the “full search”, the second is the “negotiation of a sale” service, and the final one is the “auction bidding” service.
So, what are these services?
A full search involves agents performing everything from scouting the properties, evaluating them, negotiating the price, to settling the deal. The “negotiation of a sale” involves buyers who love searching for properties by themselves but are not comfortable negotiating the price. For such buyers, an agent negotiates on their behalf. And the “auction bidding” service is for buyers who prefer to purchase a property in an auction but are unsure of their bidding skills. For such individuals, an agent bids on their behalf.
When you opt for the “full search” service, the agent’s fixed price in Australia can be from a couple of thousand Australian dollars up to $14,000 to $15,000. These fees are for basic properties. For high-valued properties, the fees could be more. Now, if you opt for an auction bidding service, the price starts from as little as $100 and can go up to $500. Sometimes it can go up to $1000 depending on the city.
Commission Or Percentage Model
Some agents calculate their fees based on the purchase value of the property. They take a percentage or a commission from the property purchase price. How much commission they get depends on the price bracket the property is in and what service you want from them. For example, if you opt for a full service and the property price is around $450,000, then a 1% commission on the price is about $4,500. Typically, the agents in Australia charge between 1% and 3% on the final purchase price.
This is quite similar to the commission model but here the agent fixes different price rates on the purchase value of the property. For example, the agent charges $6000 if the property price is between $250,000 and $500,000. If the same property is valued in the range of $500,000 and $750,000, the agent charges $9000. Between $750,000 and $1,000,000, the agent takes a fee of $12,000. This way you will know the prices beforehand and will pay less if the price is in the lower bracket.
Let’s have a look at the prices in major cities like Melbourne, Canberra, and Hobart.
Fees Of A Buyers Agent In Melbourne
Just like in Sydney, the house prices in Melbourne are pricey, so you can expect the agent’s fees to be a little on the higher side. The agents who prefer the commission model charge anywhere between 1.2% and 2.7% of the final purchase price. While agents who opt for a fixed-rate model charge around $3000 to $10,000.
Fees Of A Buyers Agent In Canberra
Agents in Canberra carry a pricey tag with them. The ones who take a percentage from the total property price, demand a commission from anywhere between 1.8% and 2.8%. And the ones who opt for a fixed-rate pricing model charge around $11,000 to $12,000.
Fees Of A Buyers Agent In Hobart
Hobart charges quite less in commission when compared to other cities in Australia. An agent can charge around 1% to 2% of the final price. When it comes to a fixed price, the fees can start from $4000 and can go up to $11,000.
What Do You Need To Do To Get A Better Deal?
In Melbourne and every other state in Australia, there is room to negotiate with agents for a better deal. To do that, here are a few tips.
- Research how much a buyers agent in the local market charges and use that price to negotiate with the agent for a better deal.
- Put forward a price that is reasonable. Don’t intentionally quote a low price. If you are reasonable with them, it becomes easy to sit at the negotiating table.
- Don’t appear to be too eager. Suppose, you tell the agent that you are desperate to purchase a property and don’t have any other agents for help, you will be at a disadvantage. The agent may use this against you in the bargaining process. When negotiating, indicate that you are not desperate and have other options also.
Purchasing a property or a home is stressful and time-consuming. From scouting, negotiating, to settling the deal, the process is lengthy and requires patience. A good buyers agent can do everything from scouting to settling the deal and more. When it comes to their price, it depends on the city, the pricing model they use, and the service they provide. In a city like Melbourne, agents take either a commission or charge a flat fee and the fees vary based on the service you choose.