Buyer’s agents work on behalf of a buyer to comb for properties that meet the buyer’s brief. In some instances, they will commence negotiations on price for the buyer too. The agent will provide professional, knowledgeable, and timely advice on property purchases for investment purposes and help secure a better deal for first-time buyers.
So, how much does a buyer’s agent cost? And what do a buyer’s agent fees look like in 2022? Let’s take a look at how a buyer’s agent will charge, and why engaging in this partnership may be a worthy investment when purchasing your first, or next property.
How Much Does a Buyer’s Agent Cost? – Fee Breakdown
Depending on the agent, there are three ways a buyer’s agent will charge their clients in NSW.
1. Fixed Fee
2. Tiered Fixed Fee
3. Percentage of the Purchase Price
There can also be additional costs or upfront deposits that will need to be paid depending on the agent.
1. The Fixed Fee
Fixed fees for buyer’s agents are often also dependent on the level of service you are looking for from the agent. Within the fixed-fee pricing, buyer’s agents can act in several different ways on behalf of the client, such as:
• Evaluating properties and negotiating
• Bidding at auction
• Full service (Searching for properties following a brief, evaluating, and auction bidding)
As a general guide, the fixed fee service with Chad Dunn ranges in price from $750 for auction bidding assistance up to $15,000 for the whole service. It is crucial to evaluate the exact services you require from a buyer’s agent before committing the cost to your budget.
The benefit of this system is that you will have an exact idea of how much you will need to pay, before the house has been purchased—allowing you to make any adjustments to your property budget if required.
2. Tiered Fixed Fee Structure
In this pricing model, your fee will change depending on the price of the property. Instead of a percentage-based charge, your cost will be fixed and charged depending on which price bracket your home is purchased for. Buyer’s agents will set a fee that will be charged when your purchase price falls within certain limits. These are typically calculated in increments of $250,000, but some buyer’s agents calculate it differently.
3. Percentage Price Structure
If you enlist a buyer’s agent that uses a percentage model, the fee you will pay will be based on the final purchase price of your property. In NSW, these fees vary based on location, but are typically between 1% and 3% of the final purchase price. Agents will charge on the lower end for a partial service and on the higher end if completing the full service.
The role of the buyer’s agent is to find the buyer the lowest possible price. This structure can lead to a conflict of interest between the purchaser and the agent. For this, the buyer’s agent will reshuffle their fees to charge a higher percentage of the sale price for a lower-priced property.
Other Costs to Consider
The buyer’s agent fees aren’t the only costs you will face; additional payments that you might be expected to pay to include:
• Interstate investor fee
• Expenses for any property assessment reports
• Formal engagement plus due diligence fees
Before contracting a buyer’s agent, always request a full schedule of fees. Buyer’s agents are not responsible for moving costs, utility connections or home insurance, so it is essential you are aware of all related moving costs when calculating your total budget.
The Price of Experience
More experienced buyer’s agents will demand increased fees from clients due to their expertise and skillset in the industry. A proven track record in areas of familiarity should see an increase in fees within their area.
Suspiciously low buyer’s agent fees should be taken with caution. Often this can mean the agent is inexperienced and without connections or negotiation skills. Whilst you will save on the fee, you will most likely end up overpaying for the property or miss out on the property altogether.
Asking ‘How much does a buyer’s agent cost?’ is not just about how much you are paying the agent; it also incorporates the cost of how much the agent will help you save on the property. It is often far more costly to not use a buyer’s agent and overpay for a property that you could have saved tens of thousands on with the help of a buyer’s agent.
Buyer’s agents can save you both time and money by negotiating a lower price on the property of your dreams. To ensure you receive the maximum savings on your property, you should choose an agent who does not have any conflicts of interest; these include selling properties themselves, or receiving commission from an owner or developer.
Is a Buyer’s Agent Fee Tax Deductible?
Are you a property investor looking to expand your portfolio? If so, when you engage the services of a buyer’s agent, the fees paid to the agent are tax-deductible. Because these fees form part of the total cost of purchasing the investment property, they will reduce the capital gains tax when you decide to sell the property later. However, if you are planning to be a resident of the property, you cannot deduct the fees.
Speak to Newcastle’s Leading Buyer’s Agent Today
How much do buyer’s agents charge with Chad Dunn? That depends on what you’re looking for. We tailor our services to ensure you’re getting everything you need from your representative.
Chad Dunn is the leading buyer’s agent in the Newcastle and Hunter Region. Chad Dunn operates on a fixed fee basis, which means you will know exactly how much you are going to be paying before we find you a property. Today’s buyer’s agent fees are wide-ranging and are often influenced by external factors such as the final selling price. With Chad Dunn, you are guaranteed transparency and professional service throughout your buying experience. Regardless of the buyer’s agent package you choose, you will receive the highest level of service from our team. Chad Dunn and the team are well-connected and can find and secure your dream home anywhere throughout Newcastle, Lake Macquarie, Port Stephens & the Hunter Region. For more information on our costs, get in touch with Chad Dunn today.
