Pros And Cons Of Using A Buyer’s Agent

What Is A Buyer's Agent?

A buyer’s agent, also known as a buyer’s advocate, is a licensed professional who represents buyers in purchasing property. They act solely in the buyer’s best interests, guiding them through every step of the home-buying process.

The dream of owning a home often comes with unexpected hurdles. Endless searches, bidding wars, and the constant fear of missing out are common challenges for buyers. This process can drag on for months, leaving them frustrated, overwhelmed, and questioning if there’s an easier way to secure their perfect property.

This is where a buyer’s agent can truly transform your property-buying experience. With their expertise, market knowledge, and negotiation skills, buyer’s agents simplify the property buying process and help buyers find their dream home faster and with less stress.

What Does A Buyer’s Agent Do?

Unlike real-estate agents, who work for the seller, buyer’s agents work exclusively for the buyer.

Here’s what they do:

• Understand Buyers’ Needs: A buyer’s agent will take the time to understand your goals, budget, and the type of property you’re after.
• Find the Right Properties: They search for properties that match your criteria, including off-market listings that aren’t publicly advertised.
• Provide Expert Advice: Using their market knowledge, they guide you on property values, growth potential, and the best areas in which to invest.
• Negotiate the Deal: Buyer’s agents are skilled negotiators who work to secure the best possible price and terms.
• Manage the Process: From inspections to settlement, they co-ordinate the entire transaction so you can focus on the excitement of owning a new home.

If you’re short on time, want access to off-market opportunities, or need expert assistance during negotiations, hiring a buyer’s agent could make a big difference in your property journey.

Who Uses A Buyer’s Agents?

High-end investors

Professional property investors or those wanting to buy multiple properties at once often use the services of buyer’s agents.

That’s because they often already have a portfolio to manage or they just don’t have the geographical reach to handle all of the transactions.

Luxury Or High-End Property Buyers

These people are typically looking for a luxury home for themselves and their families.

They tend to be high-income earners who work long and strange hours that prevent them from getting out there and finding a property themselves.

Also, because buyer’s agents have access to unlisted sales from private vendors, big spenders can often snap up a home that the general public doesn’t even know about.

Interstate buyers

People looking to take advantage of an interstate property play sometimes don’t have the ability to travel to check out the property.

A buyer’s agent located in the area can source the property for you, negotiate with the seller and come back to you with a price without you having to leave your home.

Overseas investors

Many overseas investors prefer to purchase properties, sight unseen, in another country.

Commercial property investors

Some buyer’s agents have their own commercial specialists that can help mum and dad commercial investors buy their first shop, pub or cafe.

They understand how to analyse the financials of the business you want to buy and negotiate on price.

In that way, you can make an informed decision on whether to go ahead with the transaction.

Check out our commercial property loan page to discover how we can help you get finance for a number of different commercial property types.

Call us on 1300 889 743“> +1300 889 743 or complete our free online enquiry form if you’re looking to buy an investment property.

Is It Really Worth It?

Sure, you’re saving time and effort but bear in mind that in a seller’s market, vendors and real-estate agents are unlikely to move much on price if they have 10 other potential buyers lined up.

This is particularly true in “hot” locations where there are more buyers than houses for sale.

A buyer’s agent is generally only for people who have some knowledge of the potential market value of similar properties in the location.

Otherwise, you could potentially be paying a fee for little savings on the purchase price.

You have to really be questioning what the buyer’s agent is proposing to do in terms of the sale or when sourcing a property in the first place.

Remember: They’re acting your behalf and helping you through the process but you ultimately have to run the show.

Who Doesn’t Use Buyer’s Agents?

While a buyer’s agent can add value to your property search, their services might not be affordable for everyone.

For instance, first-time homebuyers or low-deposit borrowers financing 90-95% of the value of a property may find it challenging to afford the buyer’s agent fee. The additional cost could feel out of reach, especially when budgeting for a deposit and the ongoing expenses of homeownership.

Before making a decision, however, it is important to consider both the benefits and drawbacks of hiring a buyer’s agent. While it might seem expensive, their expertise could save you time and help you avoid mistakes.

To decide whether it’s the right choice for you, let’s take a closer look at the pros and cons of using a buyer’s agent.

Pros And Cons Of Using A Buyer’s Agent

The Pros

• A buyer’s agent can help you find a property much faster.

  Finding the right property takes time, something many people struggle to spare due to work, family, or other commitments. Buyer’s agents can streamline this process by leveraging their expertise and network to identify properties that meet your criteria. They save you from wasting time on unsuitable open houses and ensure you’re making decisions with all the necessary information, including past sales and market trends.

• They provide objective advice.

  A buyer’s agent takes a step back and looks at your property goals from an objective perspective. Whether you’re buying a home to live in or an investment property, they’ll help you clarify what you want and what makes the most sense in the long run. They also provide you with insight into the location you’re considering – like its growth potential and what kind of return you can expect.

• They give you access to off-market properties.

  One of the biggest advantages of using a buyer’s agent is their ability to find properties that aren’t publicly advertised. These ‘off-market’ opportunities often come from vendors who prefer a quick and quiet sale. By tapping into their network, a buyer’s agent gives you access to properties other buyers won’t even know about.

• They help you act quickly in a competitive market.

  Timing is everything in real estate, and a buyer’s agent ensures you don’t miss out on great opportunities. They can move quickly to negotiate a deal or make an offer before the property gets snapped up by someone else. In a fast-moving market, having someone on your side who knows when to act can make all the difference.

• They can handle interstate purchases with ease.

  If you’re looking to buy property in another state, a buyer’s agent can take the stress out of the process. They know the local market, handle inspections, and negotiate on your behalf, so you don’t have to travel or worry about the logistics.

• They can bid at auctions for you.

  Auctions can be intimidating, even for experienced buyers. Without a clear understanding of market value, it’s easy to overpay. This becomes even more challenging if you’re buying from interstate or overseas, in which case you lack familiarity with the area. A buyer’s agent can represent you at the auction, bid strategically on your behalf, and ensure you stick to a reasonable limit. For those who need help only with an auction, many buyer’s agents offer this service at a lower cost than their full-service packages.

• They can help you buy multiple properties.

  If your goal is to grow your investment portfolio rapidly across different locations, a buyer’s agent with a large team can make it possible. Some buyer’s agencies even offer coaching and act as your long-term ‘investment partner’, helping you plan and execute your strategy. Working with a strong team that includes a knowledgeable buyer’s agent and a good mortgage broker can set you up for success.

• They know how to spot great investment opportunities.

  For investors, buyer’s agents are especially valuable. They can pinpoint properties with strong capital growth potential by analysing market trends, upcoming developments, and historical data. Sometimes this means recommending areas or property types you might not have considered, like a neighbouring suburb or a unit instead of a house.

• They’re skilled negotiators.

  Negotiating the price of a property is one of the trickiest parts of buying real estate, especially if you’re up against a seasoned vendor or investor. Buyer’s agents are experienced in making deals and know how to strike the right balance, pushing when needed and holding back when it’s smarter. At auctions, they stay cool under pressure and handle the process without letting emotions get in the way.

The Cons

• Their fees might not suit everyone’s budget.

  Buyer’s agents charge for their services. The amount can range from 1-3 per cent of the property price or a fixed fee from a few thousand dollars up to $20,000 or more. The exact cost depends on the complexity of the service and the value of the property. This can be a challenge for first-time buyers or those with tight budgets. If you’re borrowing a large percentage of the property value, the fee may feel like an extra expense you can’t afford.

• They’re less effective in a seller’s market.</p>

  In hot markets, where there are more buyers than homes, even the best buyer’s agent might struggle to secure you a bargain. When vendors have multiple offers to choose from, there’s often little room for negotiation, which could make the buyer’s agent’s fee harder to justify.

• Some agents may not act in your best interests.

  Not all buyer’s agents are created equal. Some charge excessive fees or earn commissions from vendors or developers, which can compromise their objectivity. Before hiring an agent, check their credentials, read testimonials, and ask if they’re a member of a professional body like the Real Estate Buyers Agents Association of Australia (REBAA).

• Their fast pace can feel overwhelming.

  Buyer’s agents are trained to move quickly, which can be a good thing in competitive markets. However, some buyers may feel rushed into decisions, especially if they’re not familiar with the process. It’s important to take your time and make sure you’re comfortable before committing to a purchase.

• Some agents lack local expertise.

  Big agents that claim to cover multiple cities or regions might not have deep knowledge of the specific market you’re targeting. Make sure the agent you work with specialises in your area and can offer reliable, localised advice.

How To Choose The Right Buyer’s Agent

Most people source buyer’s agents through their friends, family and work colleagues.

Like seeking help from any financial professional, finding someone you can trust is key so it’s worth doing your own research, too. Here’s a simple guide to help you choose someone you can trust:

• Check Their Licences and Credentials
  • Make sure the agent is licensed to operate in your state or territory.
  • It’s also a good idea to check if they’re part of professional organisations like the Real Estate Buyers Agents Association of Australia (REBAA) or the Real Estate Institute of Australia (REIA).
• Look for Experience and Expertise
  • Choose someone who knows the market you’re buying in and has experience with the type of property you’re after, whether it’s a home, investment, or commercial property.
  • Specialisation matters. If you’re buying an investment property, prioritise agents with a proven track record in sourcing high-performing properties.
• Understand Their Fees
  • Compare fee structures (fixed, percentage-based, or hybrid of those two) and ensure transparency in their pricing.
• Evaluate Their Market Knowledge
  • A good buyer’s agent should know the local market inside and out. Ask them about current trends, property values, and any up-and-coming opportunities.
  • They should also have access to off-market properties – this can be a big advantage when competition is high.
• Check Reviews and Track Record
  • Look for testimonials or reviews from previous clients. Positive feedback, especially from buyers with similar needs, is a good indicator of reliability and success.
• See How They Communicate
  • Choose someone responsive, proactive, and aligned with your goals.
• Ensure No Conflicts of Interest
  • Confirm that the agent works exclusively for buyers and does not have financial ties to sellers or developers so that you know that they’ll be working in your best interest.

Taking the time to choose the right buyer’s agent can make a big difference to your property-buying experience. By doing your research, asking the right questions, and getting recommendations, you’ll find someone who can guide you through the process with confidence and ease.

Difference Between A Buyer’s Agent And A Real-Estate Agent

Although buyer’s agents and real-estate agents both operate in the property market, their roles and responsibilities are distinct. Here’s how they differ:

How Much Does A Buyer’s Agent Cost?

For standard owner-occupied or investment properties, most buyers agents charge a flat rate for their services.

The industry standard is typically 1.5 to 3 per cent of the purchase price.

So for a home being sold for $800,000 in Melbourne, you could be paying around $12,000 to $24,000.

That may sound like a lot upfront, but if they can save you upwards of $100,000 on the purchase price, then it may be worth it.

Let’s say you had an $80,000 deposit saved for the property; your Loan-to-Value Ratio (LVR) would have been 90%, not including the cost of completing the purchase, such as conveyancing fees, stamp duty and other legal costs.

By potentially saving $88,000 on the purchase price (minus the buyer’s agent fee), your LVR would be under 90%, meaning you could be eligible for interest-rate discounts and waived LMI, depending on your profession or if you earn more than $150,000 a year.

A good buyer’s agent also receives no commissions from real-estate agents or vendors.

On top of that, some charge an engagement fee just for a consultation, while others don’t.

It’s always important to ask for their fee structure and whether you can get a discount because you were referred by a friend or a financial professional like your mortgage broker.

Is A Buyer's Agent Fee Tax Deductible?

No, the fee paid to a buyer’s advocate is generally not tax-deductible for individuals purchasing a property for personal use. However, if the property is being acquired for investment purposes, the buyer’s advocate fee may be considered a deductible expense.

For investment properties, such fees can be included in the cost base of the property and may be deductible against rental income or when calculating capital gains tax upon sale. Consult with a tax professional to understand the specific implications based on your circumstances and ensure compliance with current tax laws.

Do You Need A Home Loan?

As mortgage brokers, we can’t assist you with buying a property, but we can help you get approved for a home loan.

We also have a number of free resources that you can access on our ebooks page, such as negotiating at auction and what to look for when inspecting a property.

If you need a home loan to make your property ownership dreams a reality, call us on 1300 889 743“> +1300 889 743 or complete our free online assessment form today to speak with a mortgage broker.