What is a Buyer’s Agent? More than a Real Estate Agent
Are you looking to engage a property professional and wondering how do buyers agents get paid? Understand the role of a buyer’s agent, their value, and how the partnership will work. A buyers agent, like those at Raveche Property, is your source of truth and trusted sidekick in the real estate market.
They work on behalf of the buyer to source, inspect and negotiate the purchase of your property. Amongst the competitive Melbourne property market, the professional expertise of a buyers advocate can be the key to finding your ideal property.
At Raveche Property, we are your dedicated advocate and work tirelessly to find and secure your dream home or investment property. A professional buyers agent in Melbourne is the advantage you need in the current market to secure your dream home.
How Buyer’s Agent Get Paid: Different Payment Structures
Using a buyer’s agent can assist you in obtaining the right property for the right price. What is a buyer’s agent? They advocate for you, the buyer. They will work through every step of the property purchasing process. Beginning with property search, to inspections, negotiating and bidding at auction. A buyer’s agent’s cost can vary depending on their fee structure.
Flat Fee
Some buyer’s agents, including Raveche Property, typically charge a flat fee. This fee is a set fee you pay to your buyer’s agent independent of the final purchase price of your property.
This can be from a few thousand dollars to $15,000+ for more luxurious or competitive properties.
You may need to pay this fee upfront as an engagement fee or in instalments during your working relationship. A fixed fee can be beneficial as you know the entire cost upfront.
If you want to purchase a property of smaller value, a fixed fee may not be as cost-effective as a commission-based fee — derived from the total purchase price. However, this depends on the agent’s cost, experience and professionalism.
At Raveche, we use a fixed fee model for our services so that there are no surprises along the way for you. The client pays a portion of our agreed fee upfront. The balance is not due and payable until we secure a property and all the terms and conditions (if any) of the contract of sale have been satisfied.
Commission-Based
Another commonly used payment structure is commission-based. This is where the agent’s fee is a percentage of the final property sale price. The total varies depending on the property value.
The typical percentage in Australia is usually between 1%-3% + GST, depending on the extent of the service.
Commission-based fees can be advantageous for those purchasing a lower-valued property can save money. However, as you cannot determine the final purchase price of the property until the sale is confirmed, this can make it more difficult to budget for your agent as the amount of all the fees is unknown.
Retainer Fee
An experienced buyer’s agent may require an upfront retainer fee which can later be deducted from the total flat fee. This ensures the agent’s experience and insider knowledge are covered if the client ends the working relationship early.
If buyer’s agents charge a retainer fee this is to protect their industry expertise, time and connections. Although this can be an expense for the buyer, it builds trust and guarantees commitment from both parties in the agreement.
To learn more, read how to become a buyer’s agent.
Factors Affecting Buyer’s Agent Fees in Melbourne
In Melbourne, buyer’s agent’s fees vary depending on the client’s brief. Several factors can influence how much a buyer’s agent will cost you. Raveche Property ensures this information is known upfront and can help you understand the right service model.
Property Value and Location
Your buyer’s agent fee can increase or decrease based on the price bracket of your property brief. The buyer’s agent cost can be lower for a house in a less competitive area or a smaller land value for a lower purchase price. If the property purchase price is higher, this can increase the buyers’ agent fees.
In Melbourne’s local market, this creates variations for most buyers as there is a lot of disparity between the different areas and their values. A buyer’s agent can clarify what to expect in your preferred suburb.
Level of Service
A buyer’s agent fee can be based on a full-service package or tiered service. These variations in service impact how much the buyer’s agent costs. Some buyer’s agents charge for a full service, which includes sourcing properties, auction bidding, and negotiation service.
These full-service packages are typically at the top of the price back for a buyer’s agent. Some agents, however, will offer a partial service where they assist with sourcing properties and auction bidding on your behalf. A buyer’s agent may offer affiliated services such as pest inspections as an additional cost. Consider which service aligns with your budget and brief when engaging your buyer’s agent.
Are Buyer’s Agents Worth Their Fees?
Now we’ve covered how much a buyer’s agent costs, it’s important to know, are buyer’s agents worth their fees? No two agents are the same. You should compare costs, experience and the service they can provide.For first-home buyers, the insider knowledge and expertise of a buyer’s agent in Melbourne such as Raveche Property can be invaluable in setting you up for future success. For property investors purchasing an investment property, their fee is tax deductible.A buyer’s agent fee is part of the cost base of buying the investment property, so they reduce capital gains tax when it’s time to sell. You should always seek professional advice and ensure you have the most up-to-date information from the ATO on what is tax deductible.
How to Choose the Right Buyer’s Agent in Melbourne
When looking for a buyer’s agent in Melbourne, consider their network, experience, testimonials, and credentials. You should conduct thorough research and if possible, meet with different buyer’s advocates before selecting which may be right for you.
Some may even offer free consultations to see if the agent is right for your needs as a home buyer before locking into a contract.
Ensure your buyer’s agent specialises and aligns with your brief. Their experience in a specific marketplace, such as Melbourne’s commercial property market or off-market listings, can make all the difference.
Raveche Property prides itself on our extensive network of selling agents and an array of happy clients who have found success from our services.
Want to know more? Check out our guide to select a buyer’s agent.
Invest in your future with Raveche Property
A buyer’s advocate guides and supports you from inspection to auction and final sale in Melbourne. Understanding how your buyer’s agent gets paid helps you make an informed decision that fits your brief and budget.
Ensure you have full transparency over the total fee, and understand their pricing model and the level of service provided. Once you find the right agent, their know-how and expertise can prove invaluable for your property purchase.
At Raveche Property, we ensure you invest in the right property. Contact Raveche Property for expert advice and impeccable service for any potential buyer. In short, you should know how much does a buyer’s agent get paid and that their fees are worth it.
Ready to simplify the buying process? Contact Raveche Property today for a free consultation and see how our buyer’s agents can help you in Melbourne.
