No one likes to talk about money, but your budget is such a critical consideration when you buy or invest in real estate and it is also one of the main reasons our buyers choose to buy property off-market. As we determined in our recent post about the advantages of working with a Buyer's Advocate, saving money is the standout, but the team here at Listing Loop is so confident of the many positive results they bring to the buying process, we've included their services in our Buyer Assist service. 

You may remember that one of our top tips for buyers in 2023 was to "Keep calm and carry on," but that's not always easy when the media is constantly in our ears with doom and gloom property market forecasts. That's why, in this post, we are giving you even more reasons to consider using the support services of a Buyer's Advocate, with more in-depth information about exactly what they can do for you and what you can expect to pay for them. 

Buyer's Advocates save you time, money and a shedload of unnecessary stress

In case you need a refresh, working with a Buyer's Advocate offers you numerous benefits, especially for those buyers who are first-time buyers, time-poor, or nervous about buying in the current, choppy market conditions. Not only will your Buyer's Advocate facilitate access to more off-market properties and give you greater credibility with local sales agents, but ultimately, they will save you time, money, and a shedload of unnecessary stress during the buying process.

But what do they cost?

Fees vary from advocate to advocate and from state to state, so we can't pinpoint exactly what your Buyer’s Advocate will cost. In Victoria, for example, they charge around 1.2 and 1.75% of the purchase price of your new property, in Sydney, they charge between 1.5 and 3%, and in Queensland, the percentage ranges between 1 and 2.7%, and that's if they charge a percentage of your purchase price, because as you will see below, there are other pricing model options. And obviously, your final bill will depend on which services you engage them to handle.

In general terms, there are three main service options or plans that most Australian Buyer’s Advocates offer. These are:

1. A Full Service - This includes extensive research of the market in your preferred areas, the end result of which is a list of property recommendations that meet your criteria. If required, your Buyer’s Advocate will then organise and accompany you to view the properties, carry out the due diligence, negotiate on your behalf, and then manage your purchase through to settlement. For this service, you can look to pay an engagement fee and then between 1 and 3% of your purchase price.
2. Assessment and Negotiation - The second option is when your Buyer’s Advocate inspects a property you have found and assesses it and the contract with their expert eye, i.e., they look for any red flags that are not easy to spot if you don't have the knowledge of a licensed real estate agent, such as unfavourable "special conditions". Then they negotiate the purchase price on your behalf. This option is cheaper, but they will most likely still require an engagement fee and a percentage of the purchase price – usually between 0.7 and 1%.
3. Auction and Negotiation Assistance. This fee is generally fixed. The engagement fee is paid upfront and a similar fee is due if the buyer is successful in their purchase.

It should be noted here that these fees cover your Buyer’s Advocate’s time and not the fees for property assessment reports like pest inspections or other due diligence reports you require to proceed with your purchase.

Clearly, with so many variables, it is wise to do some research before you engage a Buyer’s Advocate so you are fully aware of your financial obligations and what exactly your money gets you. However, we would like to point out that one of the benefits of our Buyer Assist service is that we've already put in those hard yards for you.

If your budget is tight, give the jobs that require an expert eye to your Buyer's Advocate

When it comes to pricing models, choose the one that works best for you in terms of your budget and timing, but if money is tight, you should prioritise the services that require an expert. For a guide to what you can expect to spend, Doorsteps sums up the three pricing model options that are most widely used as follows:

1. Percentage of the property purchase price - For example, if you pay $650,000, and your agreed rate is 1.5% with your Buyer's Advocate, you will pay $9750 (plus GST). It should be noted here that because it is not in your Buyer’s Advocate’s interest to negotiate a lower price, some charge a higher percentage for a lower price.
2. Tiered Fixed Fee – With this option, your Buyer’s Advocate charges a fixed fee on a sliding scale, depending on which tier or price bracket the property’s purchase price lands. The pro to this option is you know what you will pay upfront, however, the price brackets are quite wide.
3. Fixed Fee – With this option, you pay a flat fee to your Buyer’s Advocate, that is not tied to the final purchase price of the property. According to Wise Real Estate, the main benefit of this approach is that it “Offers great transparency to the client regardless of the value of the property.” In Sydney, for example, fees range from $7000 to $20,000 and the benefit of this price model is that you know what you will pay upfront, however, you pay the same, regardless of the price of your new property.

Will I see a return on my investment?

Buying property in Australia is expensive for many reasons and this age-old question when it comes to investment has no definitive answer - especially in the current rocky market. What is certain is that in this type of unpredictable, competitive market, buyers must think outside the box and your Buyer’s Advocate's insider knowledge and deeper understanding of the market WILL set you apart from the competition in many ways - not to mention the potential, whopping gain of 7-13% saving on your purchase price that some Sydney agents cite.

To learn more about how our Buyer’s Advocates can help you secure your new property, book a FREE CONSULTATION with one of our team who will identify your pain points in the buying process and set you up with the perfect Buyer's Advocate to alleviate them.