Working with a buyer’s agent: 9 advantages

If you’re time poor, working with a buyer’s agent could be a good idea. They’ll do most of the legwork throughout the purchase process to save you time, you’ll just have to arrange finance and a lawyer then make the final decision.

Buyer’s agents have deep knowledge of the areas they work in so they can clue you in on everything from council zoning and market conditions to the best local restaurants and bars. This is valuable information for local buyers, but even more so for those who are purchasing from overseas. It can also be great for those buying an investment property, as buyer’s agents may know things about the area that others (including the vendor) don’t.

When you buy property you’ll need the help of a mortgage broker or lender and a property lawyer. You may also need the services of building inspectors, surveyors, tradespeople, and other professionals. A good buyer’s agent should have access to a network of professionals to make the entire process go smoothly. 

Your buyer’s agent will help you carry out due diligence and let you know what to look for. They may have building inspectors, other tradespeople and even local council contacts they can tap to help with the process. 

A buyer’s agent will help you put together and submit a sale and purchase agreement to the vendor, and perform detailed market research to help you decide how much your offer should be. This can help you avoid overpaying, or making an offer that’s too low and missing out. Your buyer’s agent can also help you fill out the sale and purchase agreement and provide advice on what conditions you may want to include. 

A good buyer’s agent should be a seasoned and skilled negotiator so they can handle the final back and forth with the vendor during a property purchase. This saves you time and stress - and could help secure a lower purchase price, or more favourable conditions. 

A buyer’s agent should always work in your interest when negotiating - they can not receive any payment from the vendor. 

When you buy property there’s a good chance you’ll be competing with other buyers for the same home. Working with a buyer’s agent can help provide an advantage. Most buyer’s agents prequalify their buyers, ensuring that they have finance in place before signing an agency agreement. That means the vendor's agent may take your enquiries more seriously as they know you’re ready to buy. 

Buyers agents must be licensed under the Real Estate Agents Act 2008, which means, to work for you, they must have a signed agency agreement. This legal document sets out the terms and conditions of the arrangement, including how much you’ll pay. 

Some buyer’s agents charge buyers a flat fee, but usually they charge a commission, calculated as a percentage of the purchase price. The good thing about commission is that, depending on your agreement with the agent you may only need to pay if you end up buying property. 

In other cases, buyer’s agents may not charge buyers anything. Some agents split the commission that the vendor's agents receive (but they cannot receive commission from both the buyer and the seller). 

Commission for buyer’s agents could be a flat fee of up to $15,000+ or a commission of around 1-3%. For example, if you buy the average property in New Zealand commission would be anywhere from $8,851 to $26,553.

According to the Real Estate Authority (REA) the agency agreement should set out:

“The conditions under which commission must be paid and how the commission is calculated, including an estimated cost (actual $ amount) of commission payable by the estimated price range of the land or business that the client is seeking to purchase.”