Hi guys,
Was doing some research about buyer’s agent, their services, fee structure etc. Seem like the fees are around $7000, or between 1 – 2% of the purchase price.
I’m planning to upgrade my home. Buy a new PPOR, turn my current place into an IP. My understanding is that if you use buyer’s agent to purchase an IP, their fees are tax deductible? But not if you were to purchase a PPOR because it’s not tax deductible – is this correct?
Say if I purchase a $600K new home (PPOR) and use a buyers agent (assuming he sealed the deal at $600K), his fee would be around $12K (using 2% rate).
While I do understand that buyer’s agent can help you find and negotiable the best property that suits your exact requirements, help to bid for property for you etc, I’m trying to justify how much ROI in paying them some $7000 – $12000 in fees where quite a lot of property out there right now are private sale property.
I was under the impression that buyers agent would be more useful if you negotiate an Auction sale, because they can take the emotions out of the purchase where demand is more than supply.
I have a pretty good idea of the price range of the suburb I wanted to buy in. And I like to do the research, visit the site, talk to sellers agents.
So, that leaves me with the negotiating bit once I found the property I wanted. How much value can a buyer’s agent provide in a softening market (such as now, where buyers have more upper hand and bargaining power)?
Any comments are welcome.
generally the ba will have more access to sales information than a buyer. They are better able to negotiate terms for the sale if there are special requirements etc.
hornbill wrote:My understanding is that if you use buyer's agent to purchase an IP, their fees are tax deductible? But not if you were to purchase a PPOR because it's not tax deductible – is this correct?Hi John
My understanding is that buyers agents fees aren't immediately tax deductible. It forms part of the cost base – so is claimable when you sell the property.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I forgot to add. It wouldn't apply to a PPOR because you wouldn't have to pay CGT on it.
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Scott No Mates wrote:generally the ba will have more access to sales information than a buyer. They are better able to negotiate terms for the sale if there are special requirements etc.Thanks Scott. You mean special requirements such as settlement date, property inspections etc?
yes & more
Jamie M wrote:I forgot to add. It wouldn't apply to a PPOR because you wouldn't have to pay CGT on it.Thanks Jamie. I didn’t know that about the bit when you can only claim BA fees after selling an IP. Guess that’s something I may need to consider in the future.
But for now, it’s for my new PPOR. Perhaps I just catch up with one of the buyers agent and see what they can offer, find out their fees etc and go from there. Only if what they can offer is much more than I can research and do myself, I might consider using their service.
Hmmm…would be interesting if any BA agents out there that offers money back guarantee if they can’t find the property I wanted.
I think that you'd find it difficult to get a money back guarantee unless you had some very tight KPIs. After all, they will present you with various options which will suit your budget, tastes, size requirements etc but you may not 'like' them.
Scott No Mates wrote:I think that you'd find it difficult to get a money back guarantee unless you had some very tight KPIs. After all, they will present you with various options which will suit your budget, tastes, size requirements etc but you may not 'like' them.I wonder if there is buyers agent out there that can offer negotiation service only. I will do the research and “check out” those suburb, houses myself and once I’ve found “the one” I like, I then let the BA check it out and do his magic with the sellers agent.
Has anyone done anything like this before?
hornbill wrote:I wonder if there is buyers agent out there that can offer negotiation service only.I suspect you'll be getting plenty of PMs!
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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