Fees for hiring buyer’s agents vary depending on the level of service you choose, the scope of job you require and their expertise. Generally, buyer’s agents will offer two main fee structures, a fixed rate or a commission model.
Pros & Cons of Commission Model / Percentage of Sale.
A commission model or percentage of sale can work well in saving money on a low value property purchase. This model can be dangerous on higher value property particularly when real estate agents under quote price. In Melbourne, it’s not uncommon for a property sale to achieve hundreds of thousands of dollars above a quoted price. A buyers agent that is motivated by a commision model could also not recommend good quality property based on a lower market value, there goal will be to maximise your budget rather than save a clients money.
Check out my podcast on buyers agents fees: fixed fee vs commissions.
In summary, problem with this model is the size of this commission could range vastly depending on the price your property falls into, and also according to the level of service you select. You would have to consider why a buyers agent would negotiate a great deal if there financially incentivised to spend more money.
Fixed Rate
A fixed rate plan offers great transparency to the client regardless of the value of the property. An advocate that offers a fixed rate also has no monetary incentive to spend more on a property to increase their own bottomline.
In most cases, the process and due diligence conducted to purchase a property doesn’t change regardless of the property value.
A fixed rate that covers our clients until a property is purchased regardless of how many auctions or private negotiations it takes. The responsibility is on our buyers agents to provide a high quality service that is paid on performance. Our clients say ‘we make buying easy.’
Why We Offer A Fixed Rate.
Wise real estate advice offers a fixed fee regardless of the clients price brackets, degree of difficulty or search criteria. Our service includes: property search, video inspection(s), auction bidding or private negotiation. We will conduct the due-diligence on the property then negotiate via private treaty or auction until a property is purchased. Importantly, the fee remains the same regardless of how many negotiations or auctions we attend.
Our clients have a choice of two service plans listed below.
Plan 1: Fully serviced buyers agent.
We offer a fixed fee regardless of the clients price brackets, degree of difficulty or search criteria. The main feature of this plan is our expert buyers agents search, recommend inspect listings based on your taylored buying criteria. We filter properties that make average long term investments maximising your long term returns.
Once we find a property to purchase, we will conduct detailed due-diligence on the property. This includes a physical property inspection, you will receive a 10 minute video of the inspection outlining maintenance and features of the listing. Market appraisal and a out lined negotiation plan.
The final step is the negotiation via private treaty or auction, until a property is purchased. The fee remains the same regardless of how many negotiations or auctions we attend.
This plan allows you to work on multiple properties at one time, across Melbourne.
Plan 2: Negotiate only plan.
Our appraisal and negotiation service is ideal for the buyer whom enjoys the search but want to bring in the experts to get the true market value of the property and know that they can secure it at the right price through expert negotiation.
This plan includes a physical property inspection, you will receive a 10 minute video of the inspection outlining maintenance and features of the listing. Market appraisal and a out lined negotiation plan.
The final step is the negotiation via private treaty or auction, until a property is purchased. The fee remains the same regardless of how many negotiations or auctions we attend.
This plan allows you to work on a single properties per negotiation across Melbourne.
If the client conducts a property search & requires a buyers agent for negotiating via and auction or private treaty, we charge a flat fee of $4,800. Inc GST, fixed rate until a property is purchased .
For more detail on our service, check out ‘our service in 3 easy steps’ page.
It’s not always about the money….
A skilled buyer’s agent has a lot more to offer than tangible real estate services. The intangible benefit of a buyer’s agent rewards their customer for the life of the property they purchase.
Even though buying property seems simple, property ownership can be plagued with hidden cost and problems.
A cheap property might seem like the right move, a great price usually means hidden cost that you will discover during ownership or on resale. A skilled buyer’s agent will reduce your exposure to this kind of property.
When selecting and inspecting real estate we focus on property that will have the best re-sale in a poor market. For investors, our selections will attract better quality tenants reducing your vacancy rate.
Ever experienced paralysis by analysis?
Many of our clients will attempt the property buying process only to be more confused than when they started.
Viewing many properties over long periods of time, pressured by real estate agents, trying to make a clear decision on a property’s value, building and pest inspections, conveyancers etc.
Our buyer’s agent’s property selection & due diligence will present all the information you need on making a clear decision on moving forward. You should only ever have to inspect a property once; we will do the rest.
Hiring a buyer’s agent with experience is a buyer’s leverage.
How Much Do You Pay Upfront To Hire A Buyer Agent?
Most buyer’s agents will ask for a proportion of their total fee to be paid upon signing the contract. This initial fee can range from $1,000 to 50% of the total fee payable. Often that fee is non-refundable and sometimes a portion is refundable if the purchase does not proceed.
At WREA, our engagement fee is approximately 30% upfront, the balance is payable only on successful purchase. Hence, if you don’t purchase, you don’t pay. This makes sure your buyers agent is always has your best interest in mind.
Summary
The world of hiring buyers agents can be a tricky with unforeseen cost to the client. Below is a quick checklist of what to look out for when it comes to paying a buyers advocate for there service.
- Fixed fees, until a property is purchased.
- No commissions.
- Only use a fully licensed buyers agent, click here for more info on buyers agent qualifications.
- Make sure your buyers advocate is a fully licensed real estate agent.
Let the above be outlined in your written agreement / contract.
At Wise Real Estate Advice, we ensure all boxes are ticked and that sincere care is taken when providing a buyer with the wise advice and action required throughout the buying process. To speak to one of our friendly buyer’s agents click here to fill out an enquiry form or just simply call us on 1300 00 WISE.
