Buying agents might have "pocket listings" that are not public knowledge, and can help position you above the competition when it comes to acquiring your dream home.
In this article, learn how buying agents uncover off-market homes. Understand the costs of buying a house. Get insights on finding the perfect home and how to know about houses even before they're listed.
What a buying agent does
A buying agent assists individuals in the process of purchasing a property. They work solely for the buyer, ensuring their client gets the right property at an optimal price.
Their tasks encompass searching for the best properties in suitable locations, negotiating with sellers, and facilitating the various aspects of the real estate transaction.
They liaise with surveyors, solicitors, planners, removals companies, etc., and iron out any problems on your behalf.
They provide access to good real estate options available off-market, pre-market, and in the open market, leaving no stone unturned in searching for the perfect property.
The difference between buyer's and seller's agents
Both types of agents are real estate agents but their roles are distinct. Selling agents represent sellers and buying agents represent the buyers. The primary difference lies in the responsibility and allegiance of the agent. This distinction underscores why homebuyers might find merit in having a dedicated professional safeguarding their interests.
Buyer's agent: house buying agents are dedicated to the buyer's needs. Their primary responsibility is to locate properties that fit the buyer's criteria, negotiate the best deal on their behalf, and provide advice on the buying process, from property viewing to completion. The primary goal of a buying agent is to secure a property for their client at the most favourable terms, ensuring the purchase price remains within their budget.
Seller's agent: a seller's agent (or listing agent), operates in favour of the property seller. When you visit a property and interact with the agent present, they are typically the seller's agent. An estate agent representing the seller focuses on maximising the asking price.
Knowing who represents whom can significantly influence the outcome of your property hunt.
For those aiming to pinpoint their dream home and secure it at a favourable price, the expertise of a buying agent can prove invaluable. A buying agent might be your key to success.
Advantages of hiring a buying agent
1. Unlocking the potential of off-market properties
Off-market properties refer to those not advertised on mainstream channels. Buying agents have privileged access to these properties. Their networks often encompass owners keen to sell discreetly, giving you an edge in discovering unique opportunities in the real estate market.
2. Streamlining the home buying process
Dealing with the numerous stages of acquiring a property can be time-consuming. From searching online to handling the legal process, a buying agent manages these stages on your behalf. This means fewer headaches for you and a smoother journey to securing the best properties in your desired location.
3. Achieving the best purchase price
One of the most tangible benefits of hiring a buying agent is their ability to negotiate the best price on your behalf. With extensive knowledge of market conditions and what similar properties have recently been sold for, they're equipped to ensure you're not overpaying. Remember, while the listing agent represents the seller's interests, a buyer's agent represents yours.
4. Keeping your best interests at the forefront
Your best interests aren't just about getting the best price. It's also about ensuring the property is a good fit, aligning with your long-term goals and lifestyle needs. A buying agent gives you impartial advice, listens to your specifications, and tailors the search accordingly.
This tailored approach ensures you're only viewing homes that align with your property requirements and your vision, saving both time and potential disappointment. Additionally, they can liaise with other professionals like surveyors to ensure the property meets all necessary criteria before the purchase agreement is signed.
Buying agent costs
Buying agents have various ways to determine their compensation and retaining fees. These methods often tie to the services rendered and the value they bring to the home buyer.
Percentage of agreed purchase price
Most buying agencies establish their compensation based on a portion of the final purchase price of the property.
Typically, a buyer's agent fee might range from 1% to 3% of the agreed price. So, if a property sells for £500,000, and the agreed fee is 2%, the fee would be £10,000.
This helps the agent find the right property at an acceptable price, ensuring alignment with the buyer's goals.
Fixed fee structures
Some buying agents prefer a more predictable payment system, especially in stable real estate markets.
Regardless of the purchase price, the agent charges a fixed fee.
This method provides transparency for both parties, as there's no uncertainty.
It's especially beneficial in situations where the property price may not necessarily reflect the effort required by the agent.
Fees contingent on savings achieved
In competitive markets, some buyer's agents will offer a unique approach. Their fee structure depends on the savings they can secure for you.
For instance, if an asking price is £550,000, but your agent manages to negotiate the price down to £500,000, they might charge a percentage of the £50,000 saved.
This approach gives the agent a strong incentive to negotiate the best possible price for their client.
It's always wise to discuss fee structures upfront and determine which approach offers you the greatest value.
Are buying agents worth it?
A good buying agent is completely worth it. You might wonder if appointing a buying agent and incurring additional fees is genuinely advantageous. Let's examine some considerations.
Local area insights: a buying agent’s deep knowledge of the local area can help pinpoint properties that match your specifications but might not be widely advertised. Their insight can be invaluable, especially when finding properties in sought-after neighbourhoods.
Negotiation skills: a seasoned buying agent can be a formidable negotiator. Especially when you find properties you love, they can ensure you don't overpay or miss out due to bidding wars. Their expertise can save money that more than offsets their fees.
Time-saving and stress reduction: the home-buying process can be overwhelming, and more so if you are time-poor. By entrusting the search, viewings, and negotiations to a professional, you regain time and reduce stress. For many, this peace of mind justifies the investment in a buying agent.
Aligning with your best interests: unlike listing agents, whose primary duty might be to the seller, a buying agent always acts with your best interests in mind. This alignment ensures that every property suggestion and every piece of advice is for your benefit.
Agent commissions: in some instances, the seller pays the agent commissions. In this scenario, as a home buyer, you might not have to bear the fee directly, making the services of a buyer's agent even more compelling.
As with all decisions in the property market, it boils down to what best suits your current market situation and individual needs.
When should you use a buying agent
Whether or not your offer is accepted has a lot to do with how you package and present yourself and your offer to the selling agent. Following are some instances where your agent can help pinpoint the finest property, that matches your criteria.
If you're buying UK property from overseas
International buyers often grapple with the intricacies of the UK property market. It is a competitive market and agents, familiar with the local area, become invaluable assets for these clients. They simplify the search, offering insights on market trends and ensuring all paperwork complies with UK law.
If you lack local area knowledge
Those purchasing a vacation home as an investment property may find a buying agent especially helpful if they lack extensive knowledge of the desired location for their second home.
Assisting first-time home buyers
First-time home buyers might feel overwhelmed by real estate jargon and processes. Buying agents step in to simplify the buying process, guiding their clients from property viewings to finalising the paperwork. By partnering with a buyer's agent, these new entrants can confidently navigate the property market.
If you're buying in a seller's market
In competitive markets, properties might receive multiple offers soon after listing. Here, the expertise of buying agents shines. They can strategise offers, ensuring their clients remain in the best position to secure their ideal property without overpaying.
If you're helping retired or nervous homebuyers
Retired and older age people who lack familiarity with the process could use some guidance. An anxious buyer can use an agent's support and representation, and count on them to give the right advice. This could prevent costly mistakes.
If you're a parent offering financial support
Parents who want to assist their adult children in the homebuying process might need help in understanding the process and potential tax implications.
Agents can lay it out in simple terms.
How to find the ideal buying agent
When searching for a buyer's agent, look at the following points:
Start by asking friends or family for referrals.
Choose an agent who is reputable, experienced, and genuinely looks out for your interests.
Checking online reviews on reputable platforms can give insights into past client experiences.
Additionally, ensure they're a member of the Property Ombudsman for added protection.
Interview multiple agents, ensuring their approach aligns with your needs.
Check their knowledge of the local market, their success rate, and the methods they employ to secure properties for their clients.
Why local knowledge matters in your property search
A buyer's agent with in-depth local knowledge is like gold in the home-buying process. Such an agent is intimately familiar with neighbourhoods, current market trends, and even off-market properties that might be just right for you.
They can caution against areas with potential development plans that could affect property values or suggest hidden gems known only to locals.
Their knowledge can be especially beneficial helping you gain an edge over other buyers. By leveraging their insights, you're not just buying a property; you're securing a home in an area best suited for your current and future needs.
How buying agents collaborate with other agents
Buying agents typically interact with multiple agents, notably listing agents. Listing agents represent sellers and showcase properties for sale.
A key part of the buying agent's duty lies in liaising with these listing agents to access information about available properties.
Often, by establishing good relations with listing agents, buyer's agents gain insights into upcoming listings, thereby giving their clients a head start.
Signing agreements
Once you've pinpointed the right agent, an agreement sets the tone for your partnership. This contract will delineate the terms of the relationship, including the agent's commission, the duration of the agreement, and any specifics tied to your property search.
Some agents operate on a "success fee" basis, meaning they earn their commission once they successfully help you purchase a new property.
Always read agreements meticulously, ensuring all your concerns are addressed, and never hesitate to question any terms that seem ambiguous or unclear.