Million-dollar savings

So you've done it, you have reached that point in your life where you can afford a multimillion-dollar home. Well, why not, what's to stop you? You are successful and worked hard to build your business and your fortune. You are a supreme winner in your own area of business, and good for you. Success is sweet and greatly admired by all.

So you find your perfect home. It just came on the market at a price you can afford. Let's say the agent's name is Bill and you have already heard of him around the traps. He has a reputation for achieving astronomic sales prices for his clients, and his reward is a well-earned and generous commission from the vendor. After all, his job is to get the highest possible price for his client.

But what about you, the buyer? Who represents you in this deal? OK, you've got the wife, the mother-in-law and numerous friendly advisors who know exactly what you should do.

To quote John McGrath of McGrath Real Estate, “While a vendor has their selling agent to negotiate for them, buyers are on their own unless they have a buyers’ agent to act on their behalf.”

And here comes the inevitable. The selling agent (who acts exclusively for the vendor) will do his or her best to outwit you every step of the way. That is his job, and they are usually very good at doing it. If you had spent 20 years doing the same thing six days of the week I’m sure you would be, too.

But you can even up the odds: engage a buyers’ agent (or buyers’ advocate) and use their experience, market knowledge and negotiating skills to give you the winning edge.

Depending on the deal he or she can to save you money on your purchase, and give you “peace of mind” about your new home.

The most frequent question asked about engaging a buyers’ agent is, “Will they save me money?”, and the answer nine times out of 10 is yes. These guys are professionals, and their income and reputation depends on successful transactions.

There are cases where the saving on the price of home purchases has largely been negated by the cost of the agent’s fee (although in investment property purchases the fee is tax deductible in New South Wales).

On the other hand there have been several deals done over the last couple of years in the upper end of the market in Sydney where the saving was well over $1 million.

All buyers’ agents charge a fee for their services; they can’t do it for nothing. There was a recent story in the international press about a buyers’ agent in Spain who acted on a “no foal, no fee” basis. The agent soon went out of business.

Buyers’ agents cannot guarantee success, but they will do their utmost to save you money and ensure that the final purchase price was the very best possible.

Tim Mansfield is founder and principal of Sydney-based buyers' agency Prime Property Buyer.