A residential buyer’s agent fee is commonly paid via 2 methods, either through a percentage commission or a fixed flat fee. Whichever payment method is used, it shall be clearly articulated and be outlined in your buyer’s agent agreement.
The fixed flat fee method involves charging a specific amount for the buyer’s agent services, regardless of the purchase price of the property. The fixed flat fee model is useful for buyers, who are budget focused and concise of over paying for the service provided, it ensures the cost is fixed, with no hidden fees, from start to finish. However, this fixed amount can vary based on the level of services offered by the buyer’s agent, geographic location (eg: regional or city based) and their expertise. This fixed flat rate can range anywhere from $3,000 to over $15,000.
A commission based fee is charged on a percentage of the property’s purchase price. The commission based fee is typically paid after the contracts have been exchanged and settlement occurs, when the exact price is known and the ownership of the property is officially transferred from the seller to the buyer. This percentage can vary, depending on the location, buyer’s agent experience, their reputation, and the agency itself, but tends to fall in the range of between 2-3%. A disadvantage of this payment structure, is since the fee is a percentage of the final purchase price, a higher-priced property will naturally entail a higher fee. This could potentially push costs beyond your budget if not accounted for.
|Sale Price||Buyers Agent Fee (2%)||Total Cost|
Note: These figures are an example only and exclude all other associated costs with the purchase of a property, including any finance or mortgage cost, settlement fees, or any legal fees and state based stamp duty, payable
Included in these fees, buyers agents may too charge a retainer or an establishment fee for service, before starting the search for a property, this fee can range between $500 to $1000 and are usually deducted from the final payment.