A buyer’s advocate can make a huge difference to your first home buying journey, but unlike many other professionals you might engage along the way, an advocate charges what can seem like a pretty hefty fee, that can be hard for first time buyers to swallow. Let’s unpack what a buyer’s advocate does, how much they charge, and whether it’s worth your hard earned coin.
What is a buyer’s advocate?
Great question. A buyer’s advocate is an experienced property professional that represents you, the buyer, during your property purchase. What many first timers don’t realise is that the selling agent is acting on behalf of the vendor. When someone sells a property, they pay their chosen agent to list, market and sell the property for as high a price as possible. So while the agent might appear helpful and like they’re looking out for you when you’re inspecting a home, they work for the vendor. There’s nobody on your side when you’re inspecting, bidding, negotiating and buying, unless you use an advocate.
How much is a buyer’s advocate?
Different advocates charge different amounts and use different fee structures, but lemme tell you, it isn’t pocket change – and that’s what a lot of us struggle to get our heads around. Some will charge a percentage of the property price, some a staggered price based on different buying scenarios, or some, like Emily Wallace, charge a flat fee of $12,000. An initial fee of $4,000 is paid upfront when you engage her, and the remaining $8,000 is paid upon her securing you a property.
Is a buyer’s advocate worth the money?
It’s understandable that paying a $12,000 fee seems out of the question when you’re trying to get your foot in the door of a spicy property market. I hear you, and would’ve felt the exact same way if you’d asked me when we were buying our apartment 4 years ago.
But that $12,000 gets you more than you’d think, and by paying it, you could actually save tens of thousands (or more!) on the property you ultimately purchase.
Wait what? How does a buyer’s advocate save me money?
Buyer’s advocates can save you money as a first home buyer in a number of ways:
Off market properties
First and foremost, buyer’s advocates often have access to properties that aren’t readily available for sale to the public. This is through their network of real estate agents and even vendors themselves. “In a hot market, the one way to get a competitive edge and save money is by eliminating competition,” Emily explains. Sometimes a vendor will feel out the market without actually launching a full sales campaign, and often deals can be done before the property even hits your favourite listing website. This can save you substantial amounts of money by avoiding competition among other buyers.
Heated property markets can see homes selling for well above their reserve price at auctions. As an example, Emily recently watched two properties in the south eastern suburbs list for between $750,000 and $850,000, both of which sold above $1M. Purchasing with an advocate off market could’ve secured these properties for less than the auction-heated final sale price!
So how common are these magical off market opportunities? Good question. So far in 2021, Emily’s purchased properties are made up of around 75% off markets. In 2020, it was more of a 50/50 split against off market vs on market. She aims to offer clients a minimum of 30% of presented properties as off markets, though this often reaches as much as 50%!
In Victoria, a vast number of properties are sold by auction. What this means is your love of the property is abundantly clear to everyone else who wants it – and vice versa. Auctions pit all the demand against one another, which often drives the price higher and higher, and let me tell you, auctions get stressful. The heat and pace of the bidding environment is incredibly complex, but an experienced buyer’s advocate can bid for you to secure your property with emotion-free ease.
When we’re buying properties for ourselves, especially as first time buyers, we attach a lot of emotion to the process. Instead of looking for structural integrity, good floor plans and capital growth potential, our minds get clouded with ideas of what a dinner party could look like in the kitchen or where you’d place your perfect velvet green couch with gold frame and how dreamy the bathroom lighting would look for an #ootd.
An advocate can help you ascertain how much is reasonable to pay for a property, and explore the financial impact of overpaying to help you make an informed choice that balances financial smarts with your own lifestyle goals.
When we finally purchased our apartment in 2017 after a long year of searching, one of the best things was getting our weekends back. For over a year we spent our Saturday and Sunday mornings queuing up to view properties, the majority of which either went way above our budget, looked grim compared to the pictures, had a major flaw in the contract, or simply wasn’t right for us. Advocates spend their entire week inspecting properties, networking with agents and vendors, and scouting out potential properties for you – Emily’s average buy time is 34 days for the sub-$1M first home buyer market! With an advocate on your side, you get to skip the hassle of viewing dud after dud, and only see the ones they shortlist against your criteria.
What happens if a buyer’s advocate doesn’t find me a property?
Every buyer’s advocate will have their own systems in place for if this happens, but Emily explains that if she isn’t able to find a client what they’re looking for, they simply don’t pay the final payment (which is two thirds of the total fee).
Book a free consultation
If this has whet your appetite for finding out more about how a buyer’s advocate could help you buy right, book a free consultation with Emily Wallace via this link. Emily services the Victorian property market, and could have the contacts, knowledge and expertise to help you get into your first home.
This article contains sponsored placement from Emily Wallace, a Melbourne buyer’s advocate specialising in first homes.