Australia’s housing market has become increasingly cutthroat, with national property values continuing to rise despite affordability pressures and the ever-changing interest rates. As buyers face tighter lending conditions and limited housing supply, working out the difference between a buyer’s agent and a real estate agent has become a very important part of making a well-informed property purchase decision.
What’s the Real Difference?
The difference between a buyer’s agent and a real estate agent comes down to who they represent during a property sale. It’s really that simple, but also kind of not. A buyer’s agent will only ever work for the buyer, where as a traditional real estate agent represents the seller. They’re both operating in the same property market, but their goals, financial motivations & negotiation strategies are completely at odds with each other.
Down under in Australia, real estate agents are legally bound to act in the best interests of the vendor. Their job is to get the highest possible price for the property & the best contract terms for the seller. Even if that means being a bit more reserved when communicating with potential buyers. It can get pretty tricky to figure out who they really are working for.
That’s increasingly become an issue in super competitive markets like Melbourne, where investors have started to look to a buyers agent Melbourne to get some real estate advice that isn’t tied to the selling side of the transaction. As the competition for properties heats up, buyers are now looking for someone who can have their back & negotiate on their behalf. Rather than just going off the info from the selling side.
The growth of buyer’s agents is a sign of a bigger shift in Australia’s property sector. The number of buyer’s advocacy firms has more than doubled since 2016. Driven by increased buyer competition, more interstate investing & a growing demand for off market deals. Sydney, Melbourne & Brisbane have really taken the brunt of this. As the rapid price rises continue to drive up the competition for good quality properties.
What’s the Cost?
The financial side of things can be pretty different for each profession. Traditional real estate agents make their money based on the sale price of the property, with the commission rates often ranging from 1.6% to 3.5%. In Victoria, the average commission rate is thought to be between 2.2% & 2.35%.
That means if a property sells for $1 million, the selling agency gets a whacking $23,000 in fees. And that’s not even including GST. If the sale price goes up, so does their commission. No wonder they’re always looking for ways to get even more bidders in. Buyers agents work on a fixed fee or a percentage of the purchase price, ranging from 1% to 3% plus GST. Fixed fees can vary between $5,000 & $20,000 depending on the value of the property, how hard it to find what you’re looking for & what kind of investment strategy you have.
Getting Your Hands-on Market Data and Off-Market Properties
The Aussie property market’s got data at its core these days. When it comes to getting a house to sell, you need to know what’s selling, in what areas, and how much people are willing to pay. So, suburb analysis, price history, rental yields and infrastructure planning are all part of the equation now. Local real estate agents know their patch inside & out, having years of experience in specific areas and working closely with vendors & developers.
On the other hand, buyers’ agents tend to focus more on finding the right property & doing long term market analysis. Many of them use some pretty heavy-duty data platforms to look at past price growth, vacancy rates, auction clearance rates, population changes and future development projects. Before making a recommendation. As the national median dwelling value keeps climbing past $820,000 in early 2025 after house price growth in the major cities, affordability for first home buyers & middle-income families is getting tighter. You’d also think the recent easing in inflation & stabilising interest rates would help. But the problem persists.
One thing that’s not getting better is transparency in the market. New research found that in Sydney and Brisbane a whole lot of house listings just don’t display the price any more. They just say “contact the agent” or “offers invited”. Which makes it a lot harder for buyers to get a true idea of what a place is worth before they jump into negotiations.
