Noosa Buyers Agent Fees: How They Work and What to Ask

By Amanda Conroy, Founder, Vendee Property Buyers

The first thing buyers ask about a buyers agent is the cost, usually before they have asked what one does. It is a fair first question, and most of the answers online are a single percentage with no explanation of what it buys.

Ask what the fee is a percentage of and when each part falls due. Then ask who else is paying the agent.

The short answer. A Noosa buyers agent is paid by the buyer, either a fixed fee or a percentage of the purchase price. Payment is usually in two parts, an engagement fee when the work starts and a success fee when a property is secured. The success fee is usually payable either on an unconditional contract or at settlement, as agreed with your buyers agent. In Queensland the agent must be appointed in writing on a Form 6, which sets out the services, every commission, fee and expense, and the date each is due. Vendee charges a fixed fee or a percentage, scoped to the mandate and disclosed in writing before engagement.

How are buyers agent fees structured?

Buyers agents generally charge in one of two ways.

A fixed fee. This is one agreed amount for a defined scope. The buyer knows the cost before the search starts, and the agent has no financial interest in the price going higher.

A percentage of the purchase price. With this model the fee moves with the price paid. Ask whether the percentage applies to the purchase price or to your stated budget, because those produce different numbers.

Most engagements are paid in two parts, with an engagement fee to start the work and a success fee once a property is secured. The success fee is usually payable either on an unconditional contract or at settlement, as agreed with your buyers agent. It can be either, so check which applies before you sign.

What does the fee depend on?

The fee depends on scope. Vendee offers three levels of engagement, and each is a different amount of work.

• Full service. This covers all nine steps of the Vendee Elite Property Acquisition Protocol, from the brief through off-market sourcing, due diligence, negotiation and settlement.
• Targeted acquisition. You have already found the property, and we run valuation, due diligence, negotiation and settlement oversight on that one asset.
• Bid and negotiate. This is auction representation only, where we set the bidding strategy and represent you on the day.

Complexity changes the scope too. An acreage purchase with bore, septic and bushfire questions is more work than an apartment. Put a troubled body corporate on that apartment and it is more work than a house.

What does Queensland law require?

A buyers agent in Queensland is a licensed real estate agent appointed by the buyer. The Queensland Government states that the appointment is made on a Form 6, and that the form sets out:

• the services the buyer’s agent will provide and any limits or conditions on them
• all commissions, fees and expenses for their services
• the due date for paying their commission, fees and expenses.

Either party can cancel the appointment by giving 30 days’ written notice, or less if both agree. If you are unclear about any part of the form or the fees, the Government’s advice is to seek independent legal advice.

You can check any agent’s licence on the public register before you sign.

Who else is paying your buyers agent?

Ask this one early, because the answer tells you whether you are dealing with a buyers agent or a referral business. Vendee is paid by the buyer only. We never accept payment, commission, referral fees or any other compensation from vendors or selling agents. An agent who also takes money from the selling side is working for both of you.

What if I do not buy?

The mandate fee covers the strategic and forensic work whether or not a property is acquired. If the due diligence finds a risk you decide not to take on, walking away is the correct outcome and part of what the fee pays for.

Ask every agent you speak to what happens to each part of the fee if no purchase is made.

Is it worth it?

On a Noosa Heads apartment where the vendor was asking over $3 million, a search of council and court records found a planned development nearby that would obstruct the apartment’s views once built. The selling agents and the building managers were unaware of it. Once it was identified, we negotiated the price down by $300,000.

An engagement will not always produce a number like that, and some end in a decision not to buy. That outcome does not show up as a saving and is often worth more.

We have advised clients who came to us with a specific property already in mind not to buy it, when it did not stand up to our due diligence.

Seven questions to ask before you sign

1. Is the fee fixed or a percentage, and a percentage of what?
2. What is payable at the start, and what is payable only if I buy?
3. When exactly does each part fall due?
4. What happens to the fee if I do not buy?
5. Do you receive anything from selling agents, vendors, developers or anyone you refer me to?
6. What is included: inspections, written reports, auction bidding, settlement?
7. Who will do the work, you or someone in your team?

If you would like our answers to all seven for your situation, schedule a briefing. It takes thirty minutes and there is no obligation.