Whether you’re a first homebuyer or looking to expand your investment portfolio, ask yourself one question before you start waltzing through the doors of inspection properties this weekend.
Are you ready to play hardball?
Navigating a real estate purchase requires time, energy and knowledge, and you’re making a great start by reading this blog.
But there’s no substitute for expert knowledge and experience, and that’s where the value lies with a real estate buyer’s agent.
What does a real estate buyer’s agent do?
Your buyer’s agent is a licensed real estate professional. But rather than acting on a seller’s behalf (that’s the seller’s real estate agent), they act as the buyer’s right-hand woman/man – that’s you! They generally do the property hunting, the property evaluating based on your criteria, and negotiate the purchase price and settlement period. You can also work with a buyer’s agent just to do the bidding for you at a property auction if you’ve found a home you love, and need someone with a bit more bite to do the grunt work.
Do I really need a real estate buyer’s agent?
As with most people looking to buy a property in Sydney, a lot of the decision comes down to price sensitivity.
So how much does a buyer’s agent cost? Some generally charge you an engagement fee before they begin searching for your new home. If you’re using a comprehensive service, expect to pay a fee of between 1.5 – 3% of the purchase property.
If you’ve found the home yourself, and just need a skilled negotiator to go to auction for you, you’ll expect to pay a much lower fee.
Aside from the cost of working with a buyer’s agent, there’s a few other factors to weigh up.
Pros of using a real estate buyer’s agent
If you’re looking for an investment property, your buyer’s agent fees will be tax deductible.
Your secret guide to the best Sydney properties
A skilled buyer’s agent will have their ear to ground and know all the insider secrets. They’ll have better access to a wider range of properties, including ones you might not have considered, and properties that are also off the market.
They put out emotional fires
Buying a home is an exciting experience, whether you plan to deck the walls with family happy snaps or play the landlord game. Although buying a home is an incredibly emotional decision, sometimes it’s best to have a third party make sure the heat of the moment doesn’t get the better of you. They’ll stay cool, calm and on task with your best interests in mind, preventing you from making any spontaneous decisions.
The secret sauce to more beach time
Your time is a precious resource, and buying a home in Sydney takes weeks of groundwork. A buyer’s agent can do the all of the hunting, short listing and property inspections. They maximise the hours they have so that they can get you a result faster.
The seller’s agent often won’t reveal the full story, and they leave out important details in the interest of selling the home faster. But they’ll be more forthcoming with a buyer’s agent, as there’s a chance they might have to work together further down the track.
Having a tough time negotiating? A good buyer’s agent will have honed their negotiation skills to an art form. They possess a keen eye for market value, and will know when a seller’s agent is asking too much.
Cons of using a real estate buyer’s agent
They’re no silver bullet
I’m a fan of buyer’s agents, but only if you understand that you’re entering into a unique partnership. It’s up to you to communicate clearly what you need, whether that’s gaining capital growth, increasing your investment portfolio, or buying a property to renovate and then resell soon. If you’re both on different pages, you’re not leveraging their value in the best way.
Obviously there is a fee associated with using a Buyers Agent. Whether there is value in it is up to each person. After all, time is money…
How to pick a good buyer’s agent
Working with a great buyer is a matter of gauging their perspective. When you have an experienced buyer’s agent, you’ll be able to find out the value of your dream property and others within the area, so that you can both negotiate a fair price. Knowledge is power!
When searching for your buyer’s agent, it helps to ask them lot of questions about their experience. But there’s no need to send that initial email with a third-degree onslaught of questions. However, always try to find out the following:
- Are they licensed?
- Are they a member of REI?
- Are they both a seller’s agent and a buyer’s agent?
- Do they specialise in certain Sydney areas?
- How long have they been working in real estate?
So to answer a very long-winded question, do you really need a real estate buyer’s agent?
Your home ownership education is the number one investment you should be making, long before you start scrolling through the ‘for sale’ section of Domain, or engaging with an agent. Home ownership and investing success is about more than just finding one good deal. You need to commit to learning all the ins and outs of property ownership and mortgages, which doesn’t start when you want to apply for a mortgage. What about learning to save for a deposit, or weighing up the pros and cons of Property Share Loans? These are all important parts of your home ownership journey, and if you don’t know where to start, asking an expert is a huge help.
Mortgage Guy is always here to lend an ear and offer advice. Why not get in touch? We’re only a quick email away.