BUYING property, especially in a heated housing market, can be a tough slog.

Enter buyers’ agents. Sort of like a real estate agent for the buyer, a buyer’s agent can give you advice, help you work out a budget, search for suitable properties, and make offers or attend auctions your behalf.

And in a market crazier than ever, buyers are appreciating the help. Rich Harvey, President of the Real Estate Buyers Agent Association of Australia (REBAA) said the popularity of their members is ‘absolutely’ increasing.

‘One [reason] is people are very time poor and just don’t have the time or inclination to go out every weekend and look for property,’ he told

‘Buyers get very frustrated when they can’t find the right property. We find that most people on their own take at least 12 months to buy a home but a buyer’s agent can speed up that process. Our average turnaround time is around 42 days from start to finish.’

The association, which was founded in 2000 with just six members, has grown to a network of 70 members and counting.

But as popularity increases along with prices, buyers’ agents have been called into question over a conflict of interest.

The CEO of ASX-listed online property agency iBuyNew, Mark Mendel, said buyers agents may play a role in pushing prices up because of the way they are remunerated.

‘Buyers’ agents charge between 1.5 per cent and 2 per cent of the purchase price of the property if they find your home and negotiate the deal or secure the property at an auction, which means the fee they charge is linked to the price you pay for the property. That is the less you pay the less they make, which seems counter intuitive to me,’ Mr Mendel said.

‘Their fees can end up being very costly, especially for people who have struggled to save to get on the property ladder.’

Veronica Morgan, Vice President of REBAA, didn’t deny that this sort of bad practice does happen within the industry.

‘I have been to auctions myself and I have had selling agents telling me that was a buyer’s agent that bought that property at that price,’ Ms Morgan told

‘I’ve got selling agents saying to me these buyers’ agents, these new people in the industry, they don’t get it. They think their only job is to secure the property … They don’t get that they are meant to be advising their clients. But [the selling agents] are going ‘bring it on’. They are happy to deal with these people; they are opening up their clients’ wallets.’

It is the same as rogue operators arising in any industry, Ms Morgan said. And the reason it arises in the buyer’s agent industry is because of the pitiful education standards to become a licenced agent.

‘The problem is in this industry that there is a very low barrier to entry and it does my head in. It is the reason I joined REBAA in the first place and the reason I became vice president.

‘Unfortunately at the moment it is very easy to get a real estate licence or a buyer’s agent licence in pretty much every state of the country without having any experience whatsoever. You can an online licencing course in most states and you could knock it over in a week.’

As an industry association, REBAA advocates for higher standards and applies its own barriers to become a member of the association, including new-to-industry buyers’ agents having to go through compulsory mentoring as well as having to demonstrate adherence to the association’s code of ethics before they can become a full member.


While there are instances of buyers’ agents pushing up house prices under a conflicted remuneration model, Mr Harvey and Ms Morgan said most of REBAA’s members – including themselves – operate on a fee-for-service basis.

‘The reason for myself, why we use a fixed fee model, is we don’t want there to be any perception of bias when we’re negotiating for the property,’ Mr Harvey told

This fee-for-service, or fixed fee, model means the cost is scaled according to the buyer’s price bracket or determined by individual search parameters. This fee is communicated to the buyer prior to engaging in the service and includes a retainer fee the buyer must pay upfront. It equates to around 2 per cent of the price expectation.

‘Let’s say you are buying an apartment for $1 million, you’d pay around a $2000 retainer fee upfront and then the success fee would be around $18,000,’ Mr Harvey said.

However, that fee is just for the full service – which includes finding a property, appraising it, negotiating it, and going to auction or making an offer.

If the buyer only wants an agent to attend an auction on their behalf, the fixed fee model has nothing to do with the property price at all. For Mr Harvey’s agency, the auction-only fee includes a $550 attendance fee and $550 success fee (or $950 success fee for a purchase over $1 million).

But whatever model a buyer’s agent uses – fixed fee or percentage of sale – he said it ‘needs to be in writing and made clear to the client upfront’.

But fees aside, Mr Mendel has also questioned whether buyers’ agents are even necessary for most ordinary homebuyers.

‘For the buyer that is incredibly time poor or the buyer that is looking for something really, really particular and it doesn’t matter whether it takes them months or years to find, a buyer’s agent is a good option,’ he told

‘But for the regular mum and dad purchasing a home or an investment property, is a buyer’s agent really necessary? You need to pay them 1.5 per cent or 2 per cent to help you find a property that is 90 per cent of the time on market anyway? [It is] probably not.’

Posted by Julia Corderoy – News Australia Network on 24th November, 2016