Buyers agent vs selling agent – Do you understand the difference?

The popularity of buyers’ agents has increased over the past few years.

So much so, that many suburban sales agents are now turning their sales staff into dedicated buyers’ agents for their office.

With this new trend occurring in what is still a relatively unfamiliar area for many, questions are being raised about the role of a buyers’ agent and how they differ to a sales agent.House owner/real estate agent giving away the keys

Buyers’ agents search, evaluate and negotiate the purchase of a property on behalf of a buyer, or they can commence work from the negotiation stage only if a buyer has already located a property.

The primary difference between a buyers’ agent and a traditional sales agent all comes down to who each party represents.

A sales agent is employed to work for the vendor (the seller) and is legally obligated to act in the vendor’s best interests at all times.

On the contrary, a buyers’ agent is legally appointed to work exclusively for the buyer.

So is there any difference between a buyers’ agent working in a suburban sales agency, versus a buyers’ agent operating in an independent buyers’ agency?

We believe there is and there are a few key differences which investors should seriously consider when making their choice.

Firstly, buyers’ agents in suburban sales offices are usually very locally driven

They have excellent knowledge of the typical suburbs their office services but tend to be more limited when it comes to suburbs outside their catchment area.

If they stick to their usual area, buyers need to consider that the small set of suburbs they happen to service may not offer the best performing investments going around.

If they do look further afield, there’s a risk their limited knowledge may be no better than your own.

Secondly, a buyers’ agent working in a sales agency (particularly if the buyers’ agent’s recent history is as a sales agent) may not have as much of an investor focusrent lease property tenant keys hand over man woman buy sell unhappy

They may genuinely want to help, but not have the knowledge or initiative to ensure they can.

For example, independent buyers’ agents have a variety of legally compliant clauses to insert in purchase contracts to protect the buyers’ interests.

They are also strong negotiators for buyers and have ample experience to easily manage situations such as holding back money from the seller for repairs and other issues that may be uncovered.

Thirdly, buyers should be aware that all agents are legally obligated not to act for, or accept, payment from both parties in a transaction (eg. the seller and buyer)

This is because it could give rise to a serious conflict of interest where buyers’ agents push buyers towards only properties in which they’re also receiving a sales commission from.

Therefore, there is no advantage to choosing a buyers’ agent in a local suburban agency as they can not buy properties for the buyer that are listed with their own agency.

If they do, it’s likely they will not ask for payment from the buyer.

However, that does mean they are then legally obligated to do what’s best for the seller – not the buyer.

And last but not least..

Sales agents and their agencies may be fantastic at selling and in knowing their local areas, but not necessarily as knowledgeable when it comes to identifying what makes a sound investment for purchase and in knowing what is right for you.

For example, do they understand the taxation system with regards to property investment?

Can they accurately estimate renovation costs? Can they undertake a feasibility study for a proposed development site?

In other words, a great salesman doesn’t necessarily make a great investor or buyers’ agent.

If you’re thinking of buying an investment property, a buyers’ agent can be worth their weight in gold.

They can not only save you the legwork, but save you money on the initial buy, save you tax, and secure you an investment that pays excellent dividends for years to come.

But be aware, not all buyers’ agents are the same.

The wrong choice of buyers’ agent could leave you saving little money and stuck with an investment that consistently under performs throughout its lifetime.



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Damian Collins


Damian is managing director of Momentum Wealth, a Perth based property investment consultancy firm. A successful property investor in his own right, Damian formed Momentum Wealth to assist time poor investors in building their portfolios and applies his many years of experience to help clients accelerate their wealth creation. Visit

'Buyers agent vs selling agent – Do you understand the difference?' have 1 comment


    December 10, 2013 R.E.

    Damian Collins clearly knows what he’s talking about, this is an excellent article. Thanks to PropertyUpdate for publishing, and to Mr. Collins for taking the time to write it.

    Keep up the great work all across the board!

    – R. Ellis


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