If you’ve been in the real estate market for a while you’re bound to have come across the terms real estate agent and buyer’s agent.
But, what are they?
And what’s the difference between them?
The main difference is that a real estate agent aims to get the best possible deal for a property seller whereas a buyer’s agent aims to get the best possible deal for a property buyer.
What is a real estate agent?
You’ll likely come across real estate agents quite often but what they actually do might not be so clear.
Essentially, someone will typically go to a real estate agent when they want to sell a property.
A real estate agent will then represent the seller and aim to get the highest possible sale price for the property.
Before you list your property for sale, a real estate agent can help you value your property and discuss the market conditions in your local area.
After they list your property, they can help to market your property to potential buyers, prepare your home for inspections, negotiate the selling price with buyers and organise the paperwork involved in the selling process.
What is a buyer’s agent?
Buyer’s agents are licensed property professionals, just like selling agents.
However, unlike a selling agent who is driven to get the best possible result for the seller, buyers agents represent investors, home buyers and developers in purchasing their properties.
A professional buyer’s agent can help you buy your home or investment property by:
- Saving you time, money and stress by helping you to purchase the perfect property at the best possible price, and under the best terms.
- Researching, negotiating and acquiring the property on your behalf.
- Assessing the real market value of suitable properties to help you make an informed buying decision – don’t be fooled all of the “hype” often generated by sales agents.
- Ensuring you don’t pay too much by not becoming emotionally involved in the auction or negotiation process.
- Saving you time and money by locating suitable properties in a timely manner.
- Sourcing the right investment property in the right location, using our expertise to ensure it will outperform the market averages.
- Helping investors build their property portfolio in a faster and safer way, by representing the investor, not the seller, developer or project marketer.
- Acting in a confidential and professional capacity at all times.
But beware… not all buyers agents are the same.
Choosing the wrong buyer’s agent could cost you tens of thousands of dollars!
Real estate agent fees and commissions
Real estate agent fees are usually charged based on a commission, a percentage of your property’s sale price.
You also have to pay for the costs involved with advertising and marketing your property.
Sometimes, these are included in the commission fee and other times, you’ll have to pay this on top of the commission.
Some real estate agents will charge the same commission rate regardless of how much your property sells for.
However, you’ll also see tiered commissions or sliding scale commissions, similar to how tax is charged depending on your income.
For example, they’ll charge 2% on the first $750,000 and then 4% on any amount above that.
This encourages them to work harder to get you a higher price.
Buyer’s agent fees and commissions
Buyer’s agent also charge a commission.
This would usually be a percentage of the sale price of the property you bought.
Sometimes, you’ll be charged a fixed fee rather than a commission rate, meaning you pay the same amount regardless of the property’s sale price.
In case you don’t end up buying a property, buyer’s agents can also charge an engagement fee when you first sign up with them.
But remember price is what you pay, value is what you get.
Don’t choose a buyers agent based on price.
Now why not read: How to choose a good buyers agent
Guest author: Ellen Orton is the Head of Business Operations at OpenAgent.com.au, an online agent comparison website helping Australians to sell, buy and own property.