A guide to buyer’s agents and their fees, part II
Questions about buyer’s agents’ fees form a key part of initial talks between agents and their potential clients.
It’s a very important conversation, and one on which the trust between the agent and their client is based. As a client you need to understand how the fee is structured, and what services will be provided.
Those services go well beyond searching for available properties and negotiation.
In our first article on fees: A guide to buyer’s agents and their fees: part I, we covered many of the questions prospective clients have. Below, we answer them in full.
There are four key areas of discussion, when it comes to buyer’s agent’s fees and what a competitive fee structure looks like. They are:
- Localisation – or specialisation
1. How does specialisation make a successful buyer’s agent?
Local knowledge is an essential ingredient for success as a buyer’s agent.
Intimate knowledge of your own ‘patch’ is crucial to understand what’s happening in your local market, and to recognise the true value of a property – values that can change significantly from property to property, from suburb to suburb and between home styles.
This specialisation enables the client to optimise their budget – to find the house they want at the price they want to pay. Just as importantly it ensures you won’t be paying more than you should – something that almost half of buyers acting on their own admit to doing.
As such, your buyer’s agent can save you a significant amount of money on your new home.
“Understanding our client’s needs, what their budget can get them, knowing the areas where they will have the best opportunity to meet their buying criteria and explaining that extensively is a crucial part of the process for a specialist buyer’s agent,” says Cohen Handler Associate Clive Delmenico.
Clive focuses on Sydney’s eastern suburbs, inner west and the city. His background working in finance and banking in Australia, the US and UK means he is well versed in the high pressure environment of negotiation – adding further value to his clients.
Specialising enables the buyer’s agent to forge strong relationships with key parties within the area including the strong relationships they enjoy with local seller’s agents. This gives you, the client, greater access to more properties, including access to off market or pre-market properties and the opportunity for reduced competition in your search.
Buying a property is one of the biggest and most important transactions you will ever make. The right buyer’s agent, with the right local knowledge, takes the gamble and the guesswork out of that transaction.
How could such specialisation help you?
2. What expertise does your buyer’s agent bring to the table?
Our buyer’s agents offer a highly professional service.
As clients you engage us, and in turn we represent your best interests, in the same way as a lawyer or accountant would. Like us, those professionals charge a fee for their services and like them we offer a strategic and highly informed approach to the process challenging you.
Leaning on our expertise, we break the basics to property purchasing down, to focus on exactly what it is you want in a new home, location, lifestyle, community and amenities.
Key to this is also educating buyers on what to expect from the process, including auctions.
It also includes access to our trusted and reputable network of other real estate professionals such as mortgage brokers, building inspectors and surveyors.
A client recently came to our North Shore expert Arija McQuillan, with a budget of $2.3 million and asked why the agent fee was a percentage, not a set fee.
“Doesn’t it lend you to buying a more expensive property?” they asked.
The client was downsizing from the Northern Beaches to Mosman and Arija, following an extensive search, found an off market property on which the seller’s agent was quoting $2.2 million. Using her suburb knowledge and after performing due diligence on the property itself, Arija valued the property at $1.95 million. It was a price that was accepted by the vendor – saving the buyer $205,000 (plus the $100,000 more they had budgeted for).
“My reputation is so important to me, as it is to the rest of the Cohen Handler team,” Arija says.
“There are buyer’s agents out there with a reputation for overpaying. But that’s not the sort of reputation you want.”
Could our client above have been able to achieve the same outcome without the help of a buyer’s agent?
3. What experience do the best buyer’s agents have?
Your buyer’s agent’s experience should deliver you a premium property transaction.
“One of the big values of the Cohen Handler network of relationships, is that as a team it gives us access to a wide range of opportunities,” Clive says.
“We are constantly in touch with selling agents, to a point that it’s never ending. It’s always a case of asking them: do you have what I’m looking for?”
“Sales agents like dealing with us and we get access to properties first. That is part of what helps to ensure the process is nice and smooth.”
With 10 years as a buyer’s agent behind us at Cohen Handler, this is experience we can illustrate.
“Potential clients always want to know: Where have you bought? Who do you know? What are your relationships in the are?. Can you get access to special deals,” says Arija.
“They are all questions we can answer to the client’s satisfaction.
“Ninety per cent of my time is spent networking and sourcing properties that aren’t online”
Our buyer’s agents are dealing with high pressure demands, negotiations and transactions on a daily basis. As an industry outsider, perhaps coming in with a limited understanding of the market, could your buyer’s agent’s experience be a game-changer for you?
4. Is your buyer’s agent independent?
Your buyer’s agent shouldn’t be part of a wider sales group. That’s when conflicts of interest can emerge and situations can arise when your interests as a buyer are not always front and centre.
Conflicts of interest do occur and are a serious issue for industry watchdogs.
If you are unsure, you need to ask if your buyer’s agent is independent. At Cohen Handler, we are a team of independent specialists working solely for the best interests of our clients.
Like specialisation, expertise and experience, this independence is crucial in a buyer’s agent and crucial in assisting you to find your ideal new home.
To learn more about Cohen Handler, and our fees and our services contact us today.