How to choose a buyer agent or buyer advocate
What to expect from a buyer's agent
A buyer’s agent should understand your needs (whether it is home buying or investment) and the goings on in the market. They use this information to source the right property; and then negotiate for that property, be it via an auction or through a private sale.
Hiring a buyer’s agent is about getting the right property. Right in terms of meeting the criteria and at the right price – as cheaply as possible. But it is not really about a bargain hunter mentality. Good quality property will invariably come at a price. You want to pay a fair price and not over-pay.
In the case of investors, this is about finding property with a track record and propensity for capital growth. The buyer’s agent also helps select the property manager and set the rent.
What to pay?
The fee tends to be based on a couple of factors, most importantly whether there are some parts of the property identification and acquisition process that you undertake yourself.
Don't try to get the cheapest buyer's agent you can find. You would not appoint the estate agent that gives you the lowest quote. Their attention, commitment and willingness to spend time to negotiate is in direct proportion to how they're being paid.
If a buyer’s agent is charging a low fee, there is a high likelihood that they depend on a high turnover rate. They will be more interested in closing the deal and moving onto the next one as opposed to maximising their client’s interests.
How independent are buyer’s agents?
Buyer’s agents should be independent of financial advisors and developers but that does not mean all of them are. If a buyer’s agent appears to have interests outside of your own, walk away.
Ask them how they are remunerated? Fees should be paid by you. If fees are paid from other sources the advice they give you may not be impartial.
What questions to ask a buyer’s agent?
- What do you specialise in? Are our interests aligned?
- Do you have any affiliations that I should know about? Are there any conflicts of interest?
- What is your experience? How well do you know this particularly area? How long have you been working in property/selling property?
- Do you have anyone I contact as a referral?
- Are you licenced? Are you a member of an association or institute?
- What are your ongoing services once the property has been purchased?
- What are the risks involved?
- What ongoing education do you and your staff undertake?