Buyer’s Agent Fees – 2020 Guide on Costs, By City

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If you’re considering engaging a buyer’s agent, cost will likely be an important factor. It’s vital to understand how much to pay a buyer’s agent and whether they’re worth the investment.

If a buyer’s agent isn’t able to reduce your property purchasing costs, then their fee is too high. But if you can find a quality agent who can save you money, their costs are usually justifiable. To help you work this out, we have provided some general figures on the costs of a buyer’s agent, both nationally and by state and territory.

Cost of a buyer’s agent in Australia

Buyer’s agents in Australia charge based on one of three pricing models:

  1. Fixed fee
  2. Tiered fixed fee
  3. Percentage of the property purchase price

They may also charge additional fees or request an upfront deposit and payment via regular instalments. Deposits are normally deductible from the final fee.

Buyer’s agent fees are negotiable, so be sure to ask for a better deal.

Fixed fee pricing model

Buyer’s agents who charge a fixed fee have pre-set the cost of their services, and the fee will not change based on purchase price. However, fees will vary depending on the service provided, for example:

  • Full service (searching, negotiating and bidding)
  • Sale negotiation only
  • Auction bidding only

As a general idea, a buyer’s agent’s full-service fixed fee can be as low as a few thousand dollars or as high as $15,000. If you are purchasing a premium home, you may pay even more, but the savings you earn could make it well worth it.

PROS: You know the price upfront.

CONS: You will pay the same regardless of the cost of your house.

Tiered fixed fee pricing model

This pricing model differs from the fixed fee model because fees will change depending on property purchase price. Buyer’s agents set a fee for each predetermined property price bracket. This could look as follows:

Property Price Bracket ($)Fixed Fee + GST
250,000 – 500,000$6,000
500,000 – 750,000$9,000
750,000 – 1,000,000$12,000

PROS: You know the price upfront and will pay less if the property price falls into a lower bracket.

CONS: You could still be paying the same as someone buying a more expensive house, as the brackets can be wide-ranging.

Be sure to check which brackets and fees apply to your buyer’s agent of choice.

Percentage pricing model

If your buyer’s agent uses this model, the fee will be based on the purchase price of your property. This means any increase in price is likely to affect your buyer’s agent fee.

Most agents will charge between 1% and 3%, depending on the service they provide. The table below shows how this works.

Property Purchase Price1% + GST2% + GST3% + GST
$450,000$4,500$9,000$13,500
$500,000$5,000$10,000$15,000
$750,000$7,500$15,000$22,500
$850,000$8,500$17,000$25,500

Buyer’s agents will usually charge a lower percentage for a partial service and a higher percentage for a full service.

Conflict of interest: A buyer’s agent’s job is to find you the lowest price. But, in this model, a lower price means a lower fee for the agent. To solve this problem, some buyer’s agents charge a higher percentage for a lower price. For example:

Property Purchase PriceFee Percentage + GST
Above $590,0002%
$580,000–$590,0002.25%
Below $580,0002.5%

PROS: You will pay according to the property price, so you could end up paying much less than someone buying a more expensive house.

CONS: You won’t know the exact cost until property price negotiations are complete. The buyer’s agent may not negotiate for the best price unless percentages are tiered.

Percentage Structure Buyers Agent Fees
Using a percentage pricing model, a lower house price usually means a lower commission for the agent.

Additional buyer’s agent costs

A buyer’s agent may charge additional costs, depending on the service they provide. These could include:

  • Costs for property assessment reports
  • Formal engagement & due diligence fees
  • Interstate investors fee

Be sure to ask for a full schedule of fees before engaging a buyer’s agent.

Are buyer’s agent fees tax deductible?

Buyer’s agent fees are tax deductible for investors. As these fees are part of the cost base of buying an investment property, they reduce capital gains tax when selling the property at a later date.

For owner-occupiers, buyer’s agent fees are not tax deductible.

Are buyer’s agents worth their fee?

Buyer’s agents can save you time and money by negotiating a cheaper price for your property. It’s important to choose a quality agent who does not have any conflicts of interest, like selling properties or earning commission from the owner or developer.

For a list of quality agents, have a look at our top Australian buyers agents list.

If you do your research and find the right agent, you can potentially save thousands more than the buyer’s agent fee. The case study below shows how you could save with a buyer’s agent.

CASE STUDY

Melissa lives in Melbourne and has a budget of $550,000 to by a new investment property in Brisbane. She finds a buyer’s agent in Brisbane who charges 2.25% of the property purchase price for their full service. They charge a $3,000 upfront deposit, which is deductible from the final price. All prices are plus GST.

John also lives in Melbourne and has the same budget for an investment property in Brisbane. He decides to go it alone, rather than engaging a buyer’s agent.

Melissa’s agent finds her a suitable property in two weeks, and she flies to Brisbane once to view the property herself. John finds his dream home after three months of searching. It’s above his budget but he simply can’t say no. Within the three months, John flies to Brisbane four times to inspect properties and locations and the median property price in Brisbane increases by 1 per cent.

The end cost for each is calculated in the table below.

 MelissaJohn
Purchase price$530,000$565,000
Flights$500$2,000
Buyer’s agent fee$11,925$0
Total cost$542,425567,000

In this case, Melissa paid almost $25,000 less than John, even though she engaged a buyer’s agent.

Buyer’s agent cost by state and territory

The cost of engaging a buyer’s agent is not regulated in Australia. This means that it can vary depending on who you engage and where you want to buy. Here is a general state and territory breakdown, by major city.

Australia Buyers Agent Cost

Cost of a buyer’s agent in Sydney, New South Wales

Property prices in Sydney are higher than in other Australian cities, so agents fee can vary greatly. On average, you can expect to pay either 1.5–3% of the property purchase price or a fixed fee of $8,000 – $21,000, with an average of $14,500.

A bidding- or negotiation-only service will likely cost you more in Sydney, with an average cost of $1,000 per property.

Cost of a buyer’s agent in Canberra, Australian Capital Territory

Buyer’s agent fees in Canberra are mid-range when compared to other states. You can expect to pay anywhere from 1.8% to 2.8% of the property purchase price.

For agents who charge a fixed fee, you are looking at an average of $12,000, but you may find buyer’s agents who charge on either side of this.

Cost of a buyer’s agent in Melbourne, Victoria

Buyer’s agents in Melbourne can set their own fees, but they typically charge between 1.2% and 2.75% of the property purchase price. Like Sydney, Melbourne house prices are high, which can lead to wide-ranging buyer’s agent fees.

Fixed fee agents will charge anywhere between $3,500 and $10,500. You could engage a buyer’s agent for auction bidding or negotiation services for as little as $500 + GST per auction or negotiation. You could also request a due diligence check for about $500 + GST.

Cost of a buyer’s agent in Brisbane, Queensland

Brisbane-based buyer’s agents are not regulated but usually charge 1–2.7% of the property purchase price or a flat fee of $6,000–$18,000.

If you are looking to engage a buyer’s agent for negotiation or bidding only, you can expect to pay between $500 and $1,000 for each of these services. You can also opt for inspections only at a rate of $550 per inspection.

Cost of a buyer’s agent in Adelaide, South Australia

If you’re buying in Adelaide, you’re in luck. South Australian buyer’s agents charge some of the lowest fees in Australia. For the percentage pricing model, the lowest rate is 1.5% and the highest is 2.4%.

Fixed fee agents usually charge an average of $10,000, but you will likely find agents charging less than this.

Cost of a buyer’s agent in Perth, Western Australia

House prices in Perth are recovering, so buyer’s agents will charge a variety of prices. You can expect to pay anywhere between 1.8% and 2.5% of the property purchase price or a fixed fee of about $11,000.

Cost of a buyer’s agent in Hobart, Tasmania

In Hobart, a buyer’s agent is likely to charge 1–2% of the property purchase price or a fixed fee of $4,000–$12,000.

Cost of a buyer’s agent in Darwin, Northern Territory

Buyer’s agents in Darwin normally charge between 1% and 3% or the property purchase price. An agent who uses the fixed fee pricing model usually charges between $5,000 and $15,000.

Should I use a buyer’s agent?

A quality buyer’s agent will always cost you money, but you can get your money back and more if they find you the right house for the right price. It’s vital to:

  • do your research and find a reputable agent
  • give your agent as much information about your wants and needs as possible
  • know your budget, their fees and how much you would need to save to make it worth it.

Most importantly, look at reviews and ask questions to determine whether a buyer’s agent is the right one for you.