Both keen investors and new homeowners will move heaven and earth to find their dream properties these days.
Amidst this temperamental current Australian market, no prospective buyer or seller is looking to lose out on a great deal.
While organising an expert to orchestrate a harmonious, stress-free purchase sounds excellent on first contemplation, what about those hefty buyer's agent fees?
Let's look at how they'll assist, how to hire the right professional and whether buyer's agent fees are worth forking out that hard-earned for!
What Do Buyer's Agents Do?
Most buyer's agents are highly-skilled, exuding their passion for real estate amongst each stage of a property purchase.
Although they're generally happy to personalise services, you'll notice a few standardised offerings across the board, including:
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Property Searches - Full and extensive or limited assistance.
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Pricing Negotiation - Persuading the vendor to agree on a more desirable price or middle ground between buying and selling parties.
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Off-market Assessments - Providing their clients with non-advertised listings.
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Increasing their opportunities to inspect and submit offers before public availability.
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Pest and Building Inspection Scheduling - Buyer's agents will likely have a list of closely-associated trades partners ready to contact in the area.
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Recommending and Arranging Conveyancers - They'll suggest and consult a local property conveyancer who specialises in purchasers for a specific locality.
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Produce Body Corporate and Strata Reports - Documentation and detailed explanation of the administration and sinking fund history.
It's important to discuss what the buyer's agent fees will include and whether any additional or 'follow-up' fees apply. Buyer's agent fees will likely vary dramatically between agencies, and nobody wants to be slammed with bulky bills post-purchase!
Buyer's Agent vs. Real Estate Agent - What's the Difference?
Buyer's agents and real estate agents aren't the same thing.
Although duplicates of the industry, these two professionals generally possess similar skill sets but work in the interest of entirely different clientele.
Buyer's agents work to sweeten the deal for the purchaser, while real estate agents support the vendor to secure the highest price possible.
This ever-fascinating agent vs. agent clash can be witnessed most Saturdays at property auctions Australia-wide. However, low-key, more discreet forms of property battles between the two behind the scenes usually involve lengthy negotiations and discussions with industry connections.
Property agents will predominantly specialise in sales or purchases, perfecting their skills and crafting their services accordingly.
Finding the Perfect Buyer's Agent - What To Look For
Any industry expert will share their spiel on how advantageous a buyer's agent can be. However, like most things in life, not all buyer's agents are created equal.
Your aim is to ensure your agent is 100% working within your interest, only without alternate motives, incentives or other informal partnerships unknowingly hindering your potential bargaining power.
Conducting a little research into an agency's staff and their experience levels should be a bit of a no-brainer, with several critical elements to seek out for the best impression possible.
Be sure to investigate
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Fees and proposed commission percentage they'll take - Obtaining this information upfront can save you exponentially on time and cash. There's no point initiating instructions to an agent whose fees are astronomically set above what you're willing to pay. A standard fee is usually around 2-4% of the purchase price to give you an idea of the sort of numbers to crunch!
For example, a property purchase of $600,000 could see you dishing out up to $24,000 in commission alone.
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Recent feedback and reviews - A buyer's agent strongly attempting to 'push' a sale on you is bad news. Other immediate red flags include negative website or local search engine reviews showcasing agencies in their worst light.
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Licenses - Is the buyer's agent you're consulting fully accredited, certified, and licensed to conduct the works they're proposing? Also, find out if they're independent and whether they accept commission from sellers like developers - not a question you want to hear a 'yes' to!
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Experience and local knowledge - Possessing suburb-specific knowledge and expertise is a buyer's agent must-have. Only hire one who specialises solely in the area you're buying in, as it's your best shot at scoring honest recommendations, properly sourced market trend information, and other genuine facts and figures that'll influence your final purchase decision.
Can I Claim Buyer's Agent Fees on My Tax Return?
In a nutshell, yes, when buying for investment purposes.
Time-poor folks are likely to be the ones seeing the most bang for their buck from buyer's agents. Between demanding careers and challenging family commitments, modern-day buyer's are left scratching heads, realising just how much time is required to invest in a property purchase.
The biggest risk?
Spending the navigational effort advancing through purchasing stages still doesn't guarantee you'll secure that property at the end of it. Purchases can play out with multiple possibilities, and starting all over again at inspection phases is, unfortunately, one of them.
Knowing buyer's agent fees are tax-deductible might be one of several deciding factors in whether it's worth hiring one to perform the groundwork on your behalf. Buyer's agents fees are considered a purchasing cost and are claimable on your regular tax return.
They'll also reduce your capital gains tax should you decide to sell the investment.
Interstate purchases where buyer's aren't familiar with local processes or markets generally call for an expert's collaboration. The hassle of trying to decipher unaccustomed purchasing procedures and attempting market research on locations you know little about is likely enough reason to pick up the phone already.
It's important to note that buyer's agent fees aren't claimable on owner-occupier purchases.
Are Buyer's Agent Fees Worth Their Services
Whether your purchasing circumstances warrant the often bank-breaking buyer's agent fees primarily depends on your individual needs.
While ultra-occupied professionals or hard-pressed working parents probably make up large percentages of a buyer's agent's client base, reasons to consult may prove as simple as having a lack of experience.
A suitable, highly accomplished agent can simplify processes, ultimately lightening the workload on you as a buyer, but what you're willing to shell out for such convenience is really up to you!