Buyers Agent Fees: What You’ll Actually Pay & Why
If you’re considering hiring a buyers agent, one of the first questions is probably how much it costs and is it actually worth it?
Most buyers agents fees are typically either a flat fee or a percentage based model. The flat fee is discussed upfront and should remain the same throughout your agreed budget. A percentage based structure means that you’re essentially paying a percentage of the purchase price.
Flat Fee Model: Lets say the purchase price is $1,800,000, your buyers agents set fee could be around $35,000. If you go over budget by up to $50,000 the buyers agent typically still charges the same fee.
Percentage Based Fees: If the fee is 2% and the property you’re purchasing is $2,000,000, the buyers agent fee would be $40,000. If you spend beyond this amount the fee is subject to change.
It’s important to note that whatever fee you agree to, either a flat fee or a percentage based model that it is transparent from the start. The best way to ensure this is to have it written into an agency agreement between you and the buyers agent with fees and services clearly outlined.
What Changes the Price?
Not every client needs the same level of support, so the fee usually reflects the scope of work.
Property Buying Service: A comprehensive property buying service is typically the most popular. It includes but is not limited to searching, shortlisting, inspecting, completing due diligence, negotiating and supporting the buyer to settlement and beyond. This service usually starts around $15,000 + for a budget of $1m.
Property Negotiation Service: This service is for the buyer who has already found a suitable property but would like professional help negotiating the purchase. There are many intricacies that most buyers don’t realise so this service is great value for money. Costing typically 50% or half of the property buying service.
Auction Bidding Service: An auction bidding service is for those who may not be confident bidding for a property at auction. It’s also a great option if you’re not available to attend the auction, but still be able to have professional representation on the day. Auction bidding fees are usually around $1,000 which covers strategy development, pre-auction research and a professional bidding on your behalf. A subsequent $1,000 fee only payable if you are the successful purchaser on auction day.
What Is A Retainer Fee?
A retainer fee is paid upfront to retain the buyers agent services. It’s paid by the buyer as commitment on their behalf to purchase a property. A retainer fee is generally between $3,000 and $5,000. If the total fee for service is $20,000 it is typically paid in the way of a $5,000 retainer fee and the subsequent $15,000 upon successful purchase.
What’s Actually Included
A buyers agent fee typically covers:
- Property search and shortlisting based on your criteria
- Off-market and pre-market opportunities
- Property due diligence
- Coordination of building/pest inspections, strata reports, contract review etc
- Negotiation or auction bidding on your behalf
- Facilitating the settlement process
Is A Buyers Agent Fee Worth It?
The honest way to determine this is to ask yourself a single question. What do I need help with?
If you are wanting to outsource a service the goal is for the outcome to be better than if you did it yourself. Think about how many times in your life you have purchased a property. A buyers agent does this every single day. Purchasing a property is one of if not the largest financial decision you will ever make and to have someone confidently guiding and supporting you at each stage is invaluable. Buyers who try to go it alone often end up searching for so long that they get priced out of the area they originally wanted, and have to settle for alternative options. Say the buyers agent fee was $16,000. You purchased in your key location, secured a superior asset under market value and it’s a property that continues to increase in value. What’s that worth to you?
Getting Started
If you’re weighing up whether a buyers agent makes sense for your situation, the best next step is a conversation, not a guess. Contact us for a free, no obligation chat to see how our team can help you.
