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What is a Buyer's agent?Buyer's Agents are licensed property professionals who work on behalf of their client to find them suitable properties that match their brief. They assists buyers purchasing a primary residence or investment porfolio. They will guide and advise you from the initial planning stage, through search, property appraisals, due diligence, background checks, negotiation, auction attendance, exchange of contracts, through to settlement. Buyers’ agents also act as the middleman, liaising between your solicitor’s, accountants, financial advisors, and mortgage broker so you don’t have to. They will also be able to interpret these specialists’ “lingo” and explain everything to you in simple terms.
Why use a Buyer's Agent?Buyers’ agents have vast industry knowledge as well as insider contacts which means they can get a first look at a property before it is advertised and even access to properties off-market. They will save you a lot of time. They will complete all the groundwork and only present you a shortlist of properties that meet your criteria. You will get your weekends back, and they can assist in arranging private inspections at times that are suitable for you. They perform due diligence & research and can assist you to arrange a building and pest inspection to ensure all the necessary checks are completed. A good buyer’s agent is also an experienced investor and is on top of any market changes. They will prevent you from falling for novice investors traps. They can negotiate the lowest price on a property due to their experienced negotiation and auction bidding skills. They are independent and unemotional so will prevent you from falling for typical real estate sales tactics. They will be your support and explain the whole process along the way. They act as the main “go to” person between your solicitor, accountant, mortgage broker and financial advisor.
Are Buyer's Agents qualified?Yes, a Buyers’ agent is required to be licensed in the state they are operating in (different licenses per state due to legislation differences). A Buyers’ agent should also be a member of a professional body such as the Real Estate Institute of NSW (or QLD, VIC, WA etc), Property Investment Professionals of Australia (PIPA), or Real Estate Buyers Agents Association (REBAA). You can check a Buyers’ Agents license registration on the Fair Trading website.
Are Buyer's Agents fees tax deductible?Purchasing A Home Buyer’s Agent fees will not be tax deductible if the agent has helped you buy a property to live in. This Is because the property you are living in will not be generating you any income (i.e. there is no rental income). The tax office views that only expenses incurred relating to you earning any assessable income can be deducted. Therefore, you will not be able to claim as a tax deduction the expenses incurred relating to the agent finding the property and negotiating the contract. Purchasing An Investment Property If you employed a Buyer’s Agent to assist you with purchasing an investment property, although not immediately tax deductible against income tax, their fees may form part of the cost base for capital gains purposes in future. This means the fees charged by your Buyer’s Agent will reduce any capital gains tax you will have to pay when it comes to selling your property. The cost base is made up of the purchase price of the property along with many of the costs associated with the purchase, holding and sale of the investment property, e.g. stamp duty, borrowing expenses (loan application fees), legal expenses, auctioneer’s fees, capital improvement outlays and buyer’s agent’s fees. Whilst an offset against future CGT may not be as financially beneficial as an immediate income tax deduction, it will offer some tax benefit in the future when you sell your property, which you may need to account for in your investing strategy.
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