What is a Buyers Agent in Real Estate and do I need one?
What is a buyer’s agent in real estate?
For a prospective property buyer in New Zealand to employ a buyer’s agent, typically they will require their services to find and help close on the right property. A buyer will expect the agent to use their experience, contacts and local knowledge to;
- Find properties both on and off the market that best fit the buyers needs
- Step in if the buyer is busy or does not feel comfortable with viewings and negotiations.
- Provide market insights and advice on making offers and sales and purchase agreements.
- Provide advice on where to carry out due diligence such as LIM reports and builders reports.
What is the difference between a buyer’s agent and a seller’s agent?
In New Zealand a buyer’s real estate agent works for or has a contract with the property buyer. Unlike the United States and the United Kingdom, buyers agents are not particularly common in New Zealand, with sellers agents making up the majority of real estate agents.
Do I require an agency agreement with a buyer’s agent?
Yes, a buyer’s agent is still required to be registered as part of the Real Estate Agents Act 2008 and therefore enter into an agency agreement prior to providing services as a real estate agent. This agency agreement should outline what the buyer’s agent’s fees are as well as the terms of service.
Why are buyer’s agents more common overseas?
In markets outside of New Zealand, it is more common to have multiple agents working on any give sale.
Let’s use the US as an example to explain how buyers’ agents operate and get paid. When you decide to buy a home, it’s common practice to enlist an agent to help you find one. Remember, in the states there is not one or two dominant websites where you can find most listings in your area, so it can be much harder to find properties online. This agent will usually attend open homes with you and advise on when to make an offer and how much. A buyers agent would be employed to be the local expert and would be expected to know the market very well.
All fees paid to the buyers agent still come from the seller. Fees are paid to the seller’s agent and typically range from 3-6%. The seller’s agent in turn split the fee with the buyer’s agent . The portion of the fees split is negotiated with each transaction. To then add to this, there are brokers for both the seller and buyer. In the States, a broker is the party who can legally list a property, not the agent. Both the buyer and seller have a broker. Their respective agencies also get a cut.
All of this is calculated, split and signed along with the sellers and buyers lawyers during the closing process.
In comparison, New Zealand has a fairly simple real estate agent to seller relationship.
Do I need a buyer’s agent?
Employing a buyer’s agent is something you should not immediately disregard. Although the trend in New Zealand is to only find a real estate agent when selling, getting help when buying is not a bad strategy. With so much advice being offered to property sellers, why not have a professional on your side as a seller?
This advice could become particularly valuable in the current market where decisions have to be made quickly. First home buyers or inexperienced buyers could make the investment in a buyers agent pay off quickly if it meant taking advice on when and when not to make an offer.
We do need to be mindful that there are certain advantages to the way the New Zealand market operates. Let’s agents and agencies involved means less fees in general (for both buyers and sellers) and allows for a reasonably efficient transaction process. Introducing more adents, brokers, lawyers and contracts could have the effect of clogging up the process and costing in both time and money.
Another reason why buyers agents might not become popular in New Zealand is the amount of regulation that exists. The Real Estate Agents Act 2008 means that much of what a buyers agent might be employed to protect you from is law already. These points include, treating all buyers equally and fairly, presenting all offers made to the seller, letting you know of any issues with the house that they know about.
Do I need a lawyer if I have a buyer’s agent?
It’s important to remember that a buyer’s agent (like a seller’s agent) should not be considered a replacement for legal advice. Remember to maintain contact with property lawyers throughout your buying or selling process.
Do buyers agents charge a fee?
Just like a traditional real estate agent, a buyer’s agent will charge a commission on the work performed. When shopping around you will notice a variety of fees and commission structures including flat rate, tiered and percentage structures. When discussing fees with a buyers agent you should be mindful of how the structure, and ultimately the final fee, will change as the price of the house goes up.
Can an agent work for both the buyer and the seller?
No, this would be a conflict of interest. Remember that both buyers and sellers agents are governed by the Real Estate Agents Act 2008 and therefore must act in accordance with this act.
Can Aframe find a buyer’s real estate agent?
Aframe most frequently find real estate agents for property sellers as in line with the New Zealand market demand, however we can also apply our technology platform to finding buyers agents. For any questions on how this can be done email email@example.com or signup and use the Aframe Chat to get more details