Have you gone to an auction lately and watched what unfolds during the auction as it proceeds? Were you curious about one bidder, Bluetooth earpiece firmly in place, huddled over their phone? Or perhaps they were bidding by phone or online for their interstate or overseas client.

Did they seem supremely confident as the bids came in?

That was a buyer’s agent in action. Don’t confuse these buying mavens with a sale agent. The primary point of difference between a sales agent and a buyer’s agent is one where the sales agent works on behalf of the vendor while the buyer’s agent works (quite hard as it happens) on behalf of the buyer.

Australia’s Property Market Never Sleeps

Australia’s metropolitan and regional property markets are on the move. Some market fluctuations are mystifying. Not all properties are created equal, not all are automatically going to increase in value.

To come out ahead and achieve your property investment goals now, more than ever, a smart property strategy will be the difference between success and broken dreams.

Duelling Interests, Duelling Agents

So, you have duelling agents facing off against one another.

One agent diligently working overtime to extract the best price they can on behalf of their vendor, while the other equally diligent agent uses their extensive experience and market knowledge to acquire a property at as low a price as possible in the interest of delivering against or below their client’s budget.

When it comes to selling or buying a property, it’s important to understand the key difference between a sales agent and a buyer’s agent in the intensely competitive real estate arena. In short, the key difference between a seller’s and a buyer’s agent is who they represent and what they are hoping to achieve for their respective clients.

Sales Agents:

• Sales agents represent their vendor in a property sale be it by auction or private sale
• A sales agent’s focus is on achieving the maximum price possible for the vendor’s property
• Their commission is typically aligned to a percentage-based fee calculated on the value of the selling price of the property (unless negotiated and agreed mutually beforehand)
• In a hot seller’s market, they will usually drive sales and property prices faster and higher often recommending a sale by auction strategy to flush out more interested potential buyers, thus driving more competition and hopefully arriving at a higher sale price
• In a tough buyer’s market, sales agents will look to actively engage prospective buyers to solicit high offers, ensuring the buyer pays as much as possible for the vendor’s property. When a buyer’s market dominates, the majority of properties seeking to attract buyers are usually sold by private treaty.

Buyer’s Agents

• Buyer’s agents represent the buyer in a property sale
• Acquiring real estate in Australia is rarely a cheap exercise, particularly for first home buyers who can’t leverage capital gains on existing properties. Unfortunately, first home buyers experience a double whammy, they also lack the real-life experience that comes in bidding at auction for properties, negotiating a sale price with sales agents and vendors when a property goes to a private sale, conducting due diligence on a property such as commissioning building and pest inspections
• First home buyers can also get excited in auctions or private sales negotiations and can lose sight of their budget constraints
• Buyer’s agents are focused on negotiating the best price together with terms and conditions on the contract that reflect the needs of their buyer
• Their commission can be either a flat fee or a percentage-based fee of the final purchase price
• In a hot seller’s market, a buyer’s agent applies their understanding of the market, of price and value trade-offs together with their extensive negotiation skills to secure a property at an appropriate market value that meets the needs and budget of their buyer
• When a buyer’s market is in the ascendancy, a buyer’s agent will drive the vendor negotiation hard, seeking to secure the property at significantly under the estimated market value on behalf of their buyer where there is scope in the negotiations
• Buyer’s agents fulfil the needs of a property buyer who lacks the available time, skills or experience to buy a property at market value without running the risk of overpaying for a property when confronted by either a seller’s market or a buyer’s market
• A buyer’s agent levels the playing field for buyers in dealing with sales agents. 

Final Observation

When a first time or seasoned property investor looking for an investment property works with a Buyer’s Agent, they understand just how they can bring compelling value to the table. A skilled, experienced Buyer’s Agent can save you significant time and effort by helping to facilitate the best possible outcome for you.

Yes, you can go it alone, but chances are, you won’t enjoy the same results as you could by simply engaging an experienced expert with years of accumulated hard-won market knowledge in the property investment space.