If purchasing property, you may be considering engaging a buyer’s agent — and wanting to know how much does a buyer’s agent will cost. A buyer’s agent is your dedicated advocate, committed to getting you the best property, for the best price.
Having an experienced buyer’s agent in your corner can mean saving money on your home or investment property. However, it’s important to understand the cost involved and the experience of the buyer’s agent.
Our article examines the fee structure, cost and benefit of obtaining a buyer’s agent. As property professionals, we want to share our keen insight to give you a clear understanding of what to expect when engaging a buyer’s advocate and ensuring you choose the right one.
Understanding The Cost of a Buyer’s Agent Fees
Using a buyer’s agent can assist you in obtaining the right property for the right price. What is a buyer’s agent? They’re the advocate for you, the buyer. They will work through every step of the process with you. Beginning with property search, to inspections, negotiating and bidding at auction.
As your trusted buyer’s agent in Melbourne, Raveche Property works with your best interest at the forefront. We are licensed professionals and work independently on your behalf. We partner with you to ensure you are in the best possible position to secure your dream property.
A Buyer’s agent’s fee structure can vary, but they typically charge in one of three pricing models — a fixed fee, percentage fee, and tiered fixed fee.
We’ll go into further detail on each of these later in this deep dive. It is essential to have transparency of the fees involved and the payment model of your buyer’s advocate upfront.
Factors Influencing Buyer’s Agent Costs
Buyer’s agent’s fees can vary greatly depending on the client’s brief. Several factors can influence how much a buyer’s agent will cost you.
Property Price and Location
How much your buyer’s agent fees are can increase or decrease depending on the property purchase price. The buyer’s agent cost can be lower if you are looking at a house in a less competitive area or a smaller land value for a lower purchase price.
Alternatively, if you want to purchase a property on the higher end in an expensive suburb, this can make the buyers’ agent fees much higher.
Level of Service
Buyer’s agents can offer packages or tiers of their services. These variations in service impact the buyer’s agent cost. Some buyer’s agents will do a full service, which includes sourcing properties, sale negotiation, and an auction bidding 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 the service is reduced to assisting with sourcing properties and auction bidding on your behalf. A buyer’s agent may also offer affiliated services such as pest inspections which will be an additional cost. Consider which service aligns with your budget and brief when engaging your buyer’s agent.
A Buyer’s Agent Cost: Common Pricing Models
Buyers should know how much buyers’ agents charge and the pricing models they use to structure their fees. Most buyer’s agents use one of the three pricing models below.
Fixed Fee
A fixed fee pricing model is a flat 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 or in instalments during your working relationship.
Percentage Fee
This is a percentage of the property’s final purchase price, so the total varies depending on the value of the property you’re looking to buy. The typical percentage in Australia is usually between 1%-3% + GST, depending on the extent of the service. Below is an example of a percentage fee cost depending on the property price.
Tiered Fixed Fee
A tiered fixed fee pricing model means the buyer’s agent fee changes depending on the final purchase price of the property. The higher the property value, the higher the cost of your buyer’s agent will be. The price brackets for these tiers are usually quite big, so if you have a set budget in mind you should be able to estimate the fee of your buyer’s agent before the final purchase.
Additional Costs and Considerations
Are buyer’s agent fees tax deductible?
If you use a buyer’s agent when purchasing an investment property, their fee is tax deductible. This is due to the buyer’s agent fee being part of the cost base of purchasing the investment property, so they reduce capital gains tax when it’s time to sell the property. You should always seek professional advice and ensure you have the most up-to-date information from the ATO.
If you are purchasing a property that will be owner-occupied, buyer’s agents fees are not tax deductible. However, a buyer’s agent can still save you on potential additional costs from purchasing a property in poor condition — a scenario they will help you avoid.
Are additional costs involved?
As we mentioned earlier, buyer’s agents can offer a full and partial service as part of their package. If you choose to, you can have your buyer’s agent conduct or organise extra services on your behalf that will incur extra costs not initially calculated. These can include pest inspections, due diligence fees and property assessment reports.
Are Buyer’s Agents Worth The Cost?
It’s important to weigh up cost vs. value when considering the buyer’s agent’s worth. Not every agent comes with the same level of experience or insight. It’s essential to do your research before committing to a contractual agreement.
Great buyer’s agents are skilled negotiators, and one of the key aspects of their service is being able to negotiate for a lower purchase price. They’ll also help you save money by avoiding potential future costs from purchasing a property in poor condition.
Buyer’s agents not only help save money but save time too. Conducting research, attending inspections and arranging property inspection reports take significant time. Your agent manages every detail for a stress-free and successful experience. For most of us, buying property will be our most important purchase.
With this in mind, it’s essential to make informed decisions to get the best property, for the best price. When you work with Raveche as your buyer’s agent, you’ll see how our expertise and insider knowledge make a buyer’s agent worth their fee.
Check out our Case Study of clients we skillfully negotiated for, getting them their dream property for the right price.
Choosing The Right Buyer’s Agent
When choosing the right buyer’s agent, experience and expertise are key. An experienced buyer’s agent can make all the difference. Meet with potential buyers agents to assess their experience, network and communication style to ensure they’re right for you. For more information on what your expectations should be, see how to become a buyer’s agent.
When you meet with buyer’s agents, there are questions you must ask to ensure they suit your brief as a client and are a professional you can rely on.
- Are you a licensed real estate professional?
- What experience do you have as a buyer’s agent?
- How is your pricing structured?
- Are there any additional costs?
When you work with the best buyer’s agents, they can become invaluable when securing your dream home. Their insider knowledge, network of real estate agents and negotiation skills are the edge you need when finding a suitable property.
At Raveche Property, we work tirelessly with a skilled and tailored approach to deliver your brief every time. We can identify when you’re receiving the best purchase price, and steer you away from any potential ‘lemons’ or problem properties. See our ultimate buyers agent guide to learn more.
Contact our buyer’s agent today to start your successful journey in the property market.
Conclusion
Consider how much a buyer’s agent costs based on your prospective brief and desired property result. When searching for and using a buyer’s agent, you should carefully consider the buyer’s agent fees, their value, and the experience they bring.
Ensure you have full transparency over the buyer’s agent fees, and thoroughly understand their pricing model and the level of service they will provide.
When you work with Raveche Property, we value your needs, considerations and goals when buying property, then develop a strategy to set you up for success. In a diverse and competitive market, Raveche is here to support you throughout the entire buying process.
Our comprehensive service caters to your personal property needs and showcases the value of a buyer’s agent’s cost.
Want to kickstart your search for your dream property with tailored services to your specific needs? Contact Raveche Property today to find your ideal buyer’s agent and get a personalised quote.
