What are buyers agent fees? How are they calculated?

8 June 2022

What are buyers agent fees? Well, both real estate agents and buyer agents earn a commission. Real estate agents earn their commission from the sale of their client’s property. A buyer’s agent gets paid a commission from the buyer by representing their best interests in the sourcing, negotiation, and project managing their property acquisition.


In NSW, fees or commissions are completely deregulated; meaning the fee and the structure is completely negotiable and this applies to buyer’s agents not just real estate agents.

According to a 2022 article written by OpenAgent, in NSW, the average real estate agent commission is 2.1%. In Sydney, the average commission is 1.82%. The same data for buyer agents do not exist.

As a real estate agent, I have many conversations with buyers agent. From these conversations, I can only really allude to how some structure fees as I’m unsure how every single buyer’s agent may structure their fees. Each buyer’s agent works differently. I hope that I can shed light on the fee structures and the rationale behind each of the structures to help give buyers guidance. When trying to understand how a fee is determined and why it is structured accordingly.

The main principle in any fee is fairness, ensuring the client is happy to pay the fee when they are successful. The twin pillars to ensuring this occurs are flexibility in choice for the client and the logical understanding of the fee structure.

3 Types of Buyers Agent Fees

There are three main ways to how a buyers agent gets paid

Percentage Fee

Many people say how is a percentage of the sale price fair? Aren’t you incentivised to increase the price as that increases your fee? At first glance, I absolutely agree. The reason a buyers agent might suggest a percentage fee to a client is generally when their brief budget is quite wide. This usually means that their requirements are broad, and they are open to many opportunities in different areas.

An example is a client who is looking for a two-bedroom apartment with a budget between $1.5 million to $2 million. Effectively, this is taking on multiple briefs for one client as the difference between $1.5 million and $2 million apartments is monumental. This increases the amount of work that a buyer’s agent needs to take on. It also eliminates the opportunity for the buyer’s agent to take on other clients with similar briefs to avoid a conflict of interest between clients. Why shouldn’t a buyer’s agent get paid more if there is more work involved and an opportunity cost involved?

As for incentives to increase the price. The difference in a percentage fee structured commission between a $2 million property with $10,000 or $20,000 increments offers is $182 to $364 respectively based on 2022 Sydney commission averages. It is not worth the extra money if the client doesn’t feel they purchased well.

Fixed Fee

Some reserve a fixed fee for clients who have a very specific budget brief and know exactly what they are looking for. They would work out that fee-based on a percentage somewhere between the budget range that the client agrees with. Clients are happy with the fixed fee because they know exactly what they will pay when the dust settles and understand that there is an incentive if the buyers agent secures their property for less than their expectations.

Performance Fee

Some offer performance-tiered structures for fees that are more variable and negotiated with clients individually. Performance fees are generally provided for clients seeking a very specific type of property. They offer uncapped high incentives for the buyer’s agent who reaches the target.

How are buyer agent fees calculated?

Now that we understand how buyers agent fees can be structured, let’s discuss how they are calculated. Generally, they are based on the complexity of the property brief, and the level of help you may require during the process. This relays back to how much work is involved. A brief that requires a lot of work can either be very broad or very precise.

A broad brief requires constant correspondence with a vast array of real estate agents across many areas. Shortlisting properties can be cumbersome as many properties can fit within the brief parameters and must be eliminated by client feedback. Organising inspections can be more difficult and not necessarily grouped together meaning more disruptions to everyone’s schedules. There is of course the opportunity cost of not being able to take on other clients whose brief parameters overlap to avoid any conflict of interest.

Just as there is more work in a broad brief there is also more work in a very precise brief. Where the client may only nominate one suburb with very particular property requirements. This can prompt a slow process of elimination of every property that fits the brief to be tediously eliminated. This is completed either by direct contact with the vendors themselves or by relying on existing relationships that the sales agents have nurtured and then working together to entice a vendor to have an easy, no-mess sale.

Important Points about buyer agent fees in general

Buyers agent fees are an important factor in any purchase. Any buyer’s agent worth their salt should be able to establish a fair price for your targeted property through recent comparable sales coupled with a consideration of market sentiment, and vendor’s expectations through nuances in agent correspondence and feedback. The buyer’s agent should then be able to provide you with a structured strategy to secure the property so there are no surprises along the way. That is where the fees really pay for themselves.

Remember that fees are deregulated in our industry. If you want to have very flexible fee structure offerings you need to have set brief requirements that are not overly broad or overly strict. That’s what buyers can bring to the table when negotiating their buyers agent fees. I help buyers refine their brief by understanding what they want to achieve through property ownership and suggesting what they can change to help them reach that goal.

Alexander Gibson

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