How do you choose a buyer's agency?

Eight questions to ask a buyer's agency

1. 1. Are you licensed in the state where I want to buy?

   Ask for the licence number, then check it on the state register yourself.

2. 2. Who will do each part of my purchase?

   Get names for strategy, research, inspections, negotiation and settlement.

3. 3. How do you choose a market and a property?

   Look for a method you can follow, with data you could check.

4. 4. How is your fee worked out, and when is it due?

   Ask whether GST is included, what is extra, and what happens if you do not buy.

5. 5. Does anyone else pay you?

   Ask about developers, selling agents, lenders and other firms they refer you to.

6. 6. What happens when a property fails a check?

   A clear process for walking away protects your deposit and your time.

7. 7. How often will you update me?

   Agree on how and when you will hear about each stage.

8. 8. How can I end the agreement?

   Read the exit terms and any fee that applies if you stop early.

What should you check before the first call?

Look the firm up on the licence register in the state where you will buy. In NSW, a buyer's agent must hold a real estate agent's licence, or a certificate of registration and work under a licensed agent. You can check this online or by calling 13 32 20. In Victoria, a company needs its own estate agent's licence, and an officer in effective control must hold a personal licence.

NSW Fair Trading also suggests asking whether the agent holds the professional indemnity insurance the law requires. Membership of an industry body is a plus, but it is optional. A firm that buys in several states should be able to show it meets the rules in each one.

What should the written agreement show?

In NSW, you sign a buyer's agency agreement before the work starts. It sets out the services and the terms, and the agent must declare any conflict of interest. The agent must keep you up to date as talks go on. They must not go above the price you agreed without your written okay.

Fees can be a fixed amount or a share of the price, and the law does not set them, so you can negotiate. Check what happens if no property is found, and how either side can end the deal. In NSW, an agent must not take a payment for referring you to a selling agent. Ask every firm about payments from developers, lenders or other service providers too.

How do you compare two firms fairly?

Give each firm the same brief: your budget, goal, time frame and the states you are open to. Ask both to explain how they would pick a market and a property for that brief. A good answer names the data they use and who checks it. It also explains what they do when a property fails a check.

Ask for a sample of the reports you would receive, with private details removed. Then ask about workload: how many purchases is your contact running at once? Past client stories and awards help, but read what each award judged. The firm you can hold to clear answers is usually a safer pick than the one with the boldest promise.