Questions to Ask Before Hiring a Buyer’s Agent

Australia’s property market is one of the world’s most fiercely competitive, with CoreLogic statistics showing that median house prices in major cities have sky rocketed over the past five years. As house prices keep going up and the competition gets even fiercer, more and more buyers are turning to buyers’ agents to help them navigate those tricky things like inspections, negotiations and investment strategies. But, not all buyers’ agents are equal, so it’s essential to do some proper homework before signing the dotted line on any agreement.

What does the Buyers Agent Bring to the Table in Your Target Market?

You really need to dig deep to understand just what kind of experience your buyer’s agent has, because the fact is property markets in different parts of Australia are all pretty different from each other. Sydney’s high-end housing market is one beast. Brisbane’s suburbs are another. Melbourne’s commercial precincts are a whole different kettle of fish again.

Just take a look at the latest figures from the Australian Bureau of Statistics and you’ll see how big the gap is. Billions and billions of dollars are changing hands in Victoria every year on commercial property deals. And it’s no wonder when you think about how complex and confusing local property markets can be, especially when you’re dealing with unfamiliar types of property.

So, when you’re looking at a buyer’s agent, make sure they can show you a proven track record in the very same suburb or property type you’re looking at, like someone who specialises in Melbourne apartments, not warehouses. Because if they don’t, you might end up with a wildly off the mark view of things like rental yields, future growth prospects and how much to pay.

Things get even trickier when you start looking at off market listings. Research from Property Investment Professionals of Australia shows that experienced agents often get to see these listings before they go public. This can give buyers a real edge in the buying process and help them get better deals. For people working with a commercial property buyers agent Melbourne, these private listings can even make a big difference in how much they pay for a place, or how well they do with long term leases.

How Do Fees Actually Work and What Are You Actually Getting for Your Money?

Fees are causing concerns in Aussie real estate because different agencies have different pricing structures. Some buyers’ agents charge a flat fee, while others take a percentage of the final sale price. And let me tell you, the industry average can throw people off the scent. It’s often between $8,000 to $25,000, depending how much the property is worth and how complicated the deal is.

At first glance those figures sound pretty cut and dried. But scratch beneath the surface and you’ll find all sorts of shenanigans going on. A flat fee can make things a lot more straightforward. The agent doesn’t get any more or less from the deal, so there’s less scope for conflicts of interest. But percentage-based commissions work a lot differently. A 2% commission on a $2 million property? That’s $40k in fees. It can easily encourage buyers to throw more money at the deal.

So, if you’re on the hunt for a buyer’s agent, ask them for a full breakdown of what’s included in the agreement. Some agencies bundle up things like auction bidding, negotiations, inspections, and due diligence into one neat little package. Others leave each service on the side and hit you up for extra cash later down the track. It’s not uncommon for fair trading agencies to get complaints from buyers about unclear fee structures. And a lot of the time, it’s only after the deal’s already well underway that the buyer realises what’s been going on.

Are Your Buyers Agent Actually Licensed and Properly Accredited?

Licensing rules are a bit of a mess in Australia, different states and territories have different regulations. So, it’s up to you to make sure your buyers’ agent is properly licenced. In Victoria, for example, buyers’ agents need to be licensed under the Consumer Affairs Victoria outfit. Professional memberships can also give you a bit more confidence in your agent’s abilities. Groups like REBAA and PIPA require their members to operate by a certain code of conduct and keep up with ongoing education. Now, membership doesn’t guarantee that your agent will do a good job. But it’s a good sign they’re committed to doing things properly.