If you are planning on buying a property in Australia, you are probably wondering how much it would cost to hire a buyer’s agent to help you find your dream property. You are also probably wondering if it is worth spending money on a buyer’s agent or if it’s worth doing it yourself. Here’s everything you need to know about a buyers agent cost and if they are worth the investment.
What does a buyer’s agent do?
A buyers agency Australia will offer you a variety of services:
- Understand your requirements – property type, location, size, budget, etc.
- Find multiple properties that fit your requirements
- Help you make the best choice from all the properties they choose for you
- Survey the property you choose and let you know its value based on the current market
- Thoroughly inspect the property and spot any potential hazards, not mentioned by the seller.
- Ensure the property is thoroughly inspected by licensed building and pest control inspectors.
- Negotiate the best price for the property and secure it
- Get the paperwork in order and ensure you sign it on time.
Is it worth hiring a buyers agent?
Yes. A buyer’s agent can ensure you end up with your dream property for the best price without you having to do any property search, inspection, negotiation, etc. Buyers agency Australia is one of the top Google searches today. That is because more and more property buyers realize that a buyer agency can save them time and money and find the best properties.
How much does a buyer’s agent cost?
A buyers agency in Australia will charge you based on one of the following pricing models:
1. Fixed fee model
The fixed fee model is a fixed fee for the services you choose. For example:
- A fixed fee for a full service (including searching for properties, negotiating, and bidding)
- A fixed fee for only negotiating a sale.
- A fixed fee for only bidding at auctions.
Pros and cons: This works great if you want to know exactly how much you will pay the agent. Unfortunately, the fixed fee will remain the same even if the property you are looking for does not cost much.
2. Percentage (of the property’s purchase price) pricing model
Under this pricing model, you will pay a percentage of the property’s value (usually between 1% and 3%). For instance, if you pay $500,000 for a home and owe the buyers agency 1% of the purchase price, you owe the agency $5,000. You will owe the agency $15,000 if they charge 3% of the property price.
Pros and cons: If the property costs less, you pay less. But you won’t know how much you will pay the agent until you have decided on the property.
A buyer’s agent must negotiate the best (lowest) price for you. However, finding the best deal means foregoing a larger agent’s fee. As a result, some buyer’s agents charge a higher fee when a property costs less. For example, they may charge 2.5% on a property worth less than $580,000 and only 2% on a property worth more than $590,000.
3. Tiered fixed fee model
Here, you will pay a fixed price for a property price bracket. For example, if you buy a property worth $250,000 to $500,000, you may be required to pay a fixed fee of $6000+GST. Whereas a property worth $750,000 to $1,000,000 may require a fixed price of $12,000+GST.
Pros and cons: The good news is that, unlike the fixed fee model, you may be able to pay less if your chosen property falls in a lower bracket. Still, if the brackets are wide-ranging (for example (450,000 to 750,000), you may end up paying as much as someone buying a $750,000 house. Even if your property costs only $450,000.
Varying fees and additional charges
Buyer’s agent fees are not fixed in Australia because they are not regulated. Fees can differ from one agency to the next, depending on the state or territory. For example, a buyers agent Sydney can charge you 1.5% to 3% of the property’s price or a fixed fee of anywhere between $8,000 and 21,000. A buyers agent Melbourne may charge between 1.2% and 2.75% of the property’s price or a fixed fee of anything between $3,500 and $10,500.
Finally, keep in mind that a buyers agency may charge you additional fees for property assessment reports, interstate investor fees, building inspections, pest inspections, and formal engagement & due diligence fees.
Final thoughts:
Is it worthwhile to hire a buyer’s agent? Yes, absolutely. You decide what services you want them to provide and then pay them only for those services. It’s the best way to get your dream property without the headache of searching for it on your own.
