In the world of property investment, terminology can be misleading. You will encounter many professionals calling themselves “agents,” yet their roles, legal obligations, and incentives are often diametrically opposed. For a novice investor, confusing a selling agent for an impartial advisor is a mistake that can cost tens of thousands of dollars in purchase price and significantly impact long-term portfolio performance.
While both buyer’s agents and real estate agents are licensed professionals operating within the property market, they sit on opposite sides of the transaction table. One is legally bound to maximise the sale price for the vendor; the other is dedicated to minimising the purchase price and managing risk for the investor.
This guide provides a transparent, investment-focused breakdown of the differences between these two roles. By understanding who represents who, how they are paid, and what they are incentivised to achieve, you can make smarter acquisition decisions and build your portfolio with confidence rather than emotion.
Quick Definitions: The Selling Agent vs The Buyer’s Agent
To navigate the market effectively, investors must first clarify the terminology. In Australia, the term “real estate agent” is most commonly used to describe the professional selling the property. However, the industry is split into two distinct camps.
The Real Estate Agent (Selling/Listing Agent)
A real estate agent, often referred to as a selling or listing agent, is engaged by the property owner (the vendor). Their primary function is to market the property and secure a buyer. Legally and ethically, their loyalty lies with the seller. Their goal is to achieve the highest possible price and the most favourable contract terms for the vendor.
The Buyer’s Agent (Buyer’s Advocate)
A buyer’s agent is a licensed professional engaged by the purchaser (the investor). Their role is to source, evaluate, and negotiate the purchase of a property. Their legal obligation is to the buyer. Their goal is to identify high-performing assets, secure them for the lowest possible price—often aiming for below-market value—and ensure the contract terms protect the investor’s interests.
While both agents hold real estate licenses and understand property law, their “client” is different. In a transaction, the selling agent is the offence (trying to score a high price), and the buyer’s agent is the defense (protecting capital and ensuring value).
Who Represents Who (And Why It Matters)
“Representation” in real estate refers to a fiduciary duty—a legal obligation to act in a client’s best interest. This is the single most critical concept for investors to grasp.
When you attend an open home and ask the selling agent, “What is this property worth?” or “How much should I offer?”, you are asking for advice from a professional who is contractually obligated to work against your financial interests. A selling agent must act in the seller’s best interest. They cannot tell you if a property is overpriced, nor can they disclose the lowest price a vendor might accept (unless instructed). Their job is to create urgency, highlight the property’s best features, and downplay negatives to drive the price up.
Conversely, an investment-focused buyer’s agent represents you. They act as a buffer against the selling agent’s sales tactics. They are required to disclose any negative findings during due diligence, advise you if a property is poor value, and use data to justify a lower offer.
For investors, representation is the difference between buying on emotion and buying on evidence. Without your own representation, you are the only person in the transaction without a professional advocate.
How Each Role Gets Paid (Incentives Explained)
Understanding how an agent is paid reveals their motivation. The fee structures for selling agents and buyer’s agents are designed to align with their respective clients’ goals.
Selling Agent Incentives
Real estate agents typically work on a commission basis, paid by the seller. This commission is usually a percentage of the final sale price. Therefore, the higher the sale price, the more the agent earns. This creates a direct financial incentive for the agent to extract every possible dollar from the buyer. While they want to close the deal, they are motivated to push the price as high as the market will bear.
Buyer’s Agent Incentives
Buyer’s agents are paid by the investor. This is typically structured as a fixed engagement fee plus a success fee, or a fixed percentage of the purchase price.
- Alignment of Interest: While it might seem counterintuitive to pay a percentage of the purchase price, reputable investment buyer’s agents are focused on long-term relationships and portfolio building. Their reputation relies on securing capital growth and strong yields.
- The “Cost” of Free Advice: Investors often rely on selling agents because their advice appears “free.” However, if a selling agent persuades you to pay $50,000 more than a property is worth, that “free” advice has become incredibly expensive. A buyer’s agent’s fee is an upfront cost designed to save money on the asset price and prevent costly mistakes.
What a Real Estate Agent Does in a Sale
To understand why you cannot rely on a selling agent for investment advice, it is helpful to look at their scope of work. A selling agent is a marketer and a negotiator for the vendor.
Their typical tasks include:
- Pricing Strategy: Advising the vendor on the likely selling price range based on market heat.
- Marketing Campaigns: coordinating photography, floor plans, and listing descriptions to make the asset look as attractive as possible.
- Open Homes: Managing inspections to generate competition among buyers.
- Vendor Negotiation: Fielding offers and leveraging buyers against one another to increase the final price.
- Contract Management: Ensuring the contract of sale is executed to the vendor’s advantage.
Crucially, a selling agent is not hired to analyse whether a property is a good investment. They are not responsible for assessing rental yield, potential capital growth, or structural risks for the buyer. Their job is done when the property is sold, regardless of how it performs for the purchaser in the future.
What a Buyer’s Agent Does for an Investor
An investment-focused buyer’s agent, like House Finder, operates with a completely different methodology. Their process is analytical rather than promotional.
1. Strategy and Criteria
Before looking at properties, a buyer’s agent helps the investor define a strategy. Are you looking for cash flow, capital growth, or a balance? They use this to determine the right high-growth suburbs and property types, removing emotion from the selection process.
2. Sourcing (On and Off-Market)
Buyer’s agents source properties through two channels. They review on-market listings, filtering out 99% of stock that doesn’t meet investment grade. More importantly, they access off-market opportunities—properties selling silently through agent networks. These deals often allow investors to purchase with less competition, potentially securing assets below market value.
3. Evaluation and Data Analysis
A buyer’s agent values a property based on comparable sales data, not the asking price. They assess the rental yield, vacancy rates in the area, and local infrastructure projects that could drive future growth.
4. Due Diligence
They manage the risk assessment, coordinating building and pest inspections and reviewing strata reports (if applicable). They look for reasons not to buy, protecting the investor from “money pits.”
5. Negotiation
Using the data gathered, they negotiate the purchase terms. This isn’t just about price; it includes settlement terms and access for tenancy. Experienced buyer’s agents can often secure properties for significantly less than an unrepresented buyer, simply by removing emotion and using evidence-based negotiation.
Comparison Chart: At a Glance
The following table summarises the key differences between the two roles to help investors distinguish between them.
| Feature | Real Estate Agent (Selling Agent) | Buyer’s Agent (Advocate) |
| Represents | The Seller (Vendor) | The Buyer (Investor) |
| Primary Goal | Highest possible sale price | Lowest possible purchase price & best terms |
| Paid By | The Seller | The Buyer |
| Key Task | Marketing and creating competition | Sourcing, due diligence, and risk management |
| Negotiation Style | Push price up (Create urgency) | Push price down (Use data/flaws) |
| Market Access | Listed properties (On-market) | On-market & Off-market (Silent listings) |
| Best For | Selling a property | Buying/Building a portfolio |
| Limitation | Cannot offer independent advice to buyer | Cannot sell your property |
When Investors Benefit Most From a Buyer’s Agent
While some investors choose the DIY route, engaging a buyer’s agent is a strategic lever for specific investment scenarios.
- You want access to off-market deals
In competitive markets, the best investment stock often sells before it hits the internet. Investors seeking less competition and better pricing use buyer’s agents to tap into these private networks. - You are buying interstate or remotely
Investing where you live limits your options. To maximise growth, you often need to look at markets across Australia. A buyer’s agent acts as your “boots on the ground,” inspecting properties in high-growth corridors near capital cities so you don’t have to fly interstate. - You are time-poor
Analysing suburbs, inspecting properties, and organising due diligence takes hours every week. Busy professionals use buyer’s agents to outsource the heavy lifting, stepping in only to make the final decision. - You want to avoid overpaying
In a rising market, FOMO (Fear Of Missing Out) leads many investors to overpay. A buyer’s agent provides a disciplined, data-backed valuation, preventing you from paying more than the asset is worth. - You are building a scalable portfolio
If the goal is to acquire multiple properties, you need a repeatable system. Buyer’s agents provide a streamlined acquisition process, allowing investors to scale their portfolios faster than they could on their own.
Common Misconceptions
There are several myths regarding the relationship between agents and investors that need to be debunked.
- “Selling agents work for both sides.”
This is false. While a selling agent may be friendly and helpful, their legal fiduciary duty is to the seller. They cannot serve two masters. If push comes to shove, they must prioritise the vendor. - “Off-market always means cheap.”
Not necessarily. Some off-market deals are sellers with unrealistic price expectations testing the market. A buyer’s agent filters these out, focusing only on genuine off-market opportunities where the vendor is motivated to sell quickly and quietly. - “Buyer’s agents are only for first home buyers.”
Agencies like House Finder are strictly investment-focused. The metrics used to buy an investment property (yield, capital growth, vacancy rates) are different from buying a home to live in. Experienced investors use agents to remove emotion and focus purely on the numbers. - “A buyer’s agent guarantees a 20% discount.”
No professional can guarantee a specific discount on every single deal, as real estate is subject to market forces. However, a strategic buyer’s agent aims to secure properties below market value by leveraging off-market access and negotiation skill. It is a strategic goal, backed by a track record, rather than a blanket promise.
Questions Investors Should Ask Before Engaging Any Agent
Before signing an engagement agreement, investors should vet potential partners with these questions:
- Who do you represent? Ensure they are an exclusive buyer’s agent, not a selling agency that also helps buyers (which can create conflicts of interest).
- How are you paid? Confirm the fee structure is transparent.
- What markets do you focus on? Look for agents with a wide scope who can target high-growth areas near capital cities, rather than being restricted to a single suburb.
- What is your acquisition process? Ask how they source and filter properties.
- How do you assess value? They should be able to show you comparable sales reports and data analysis, not just “gut feel.”
- Do you access genuine off-market opportunities? Ask for examples of recent off-market purchases.
- What does due diligence include? Ensure they coordinate building and pest inspections and legal reviews.
Frequently Asked Questions
What is the difference between a buyer’s agent and a real estate agent?
A real estate agent represents the seller and aims to get the highest price. A buyer’s agent represents the buyer (investor) and aims to get the lowest price and best terms.
Who does the real estate agent represent?
The real estate agent represents the vendor (the property owner). They have a fiduciary duty to act in the seller’s best interest.
Do buyer’s agents find off-market properties?
Yes. Buyer’s agents have relationships with selling agents and private sellers, allowing them to access properties that are not advertised to the general public.
Are buyer’s agents worth it for investors?
For most investors, the fee is offset by the savings negotiated on the purchase price, the time saved in research, and the avoidance of buying a poor-quality asset.
Can I negotiate without a buyer’s agent?
Yes, but you will be negotiating against a professional selling agent who does this daily. A buyer’s agent levels the playing field.
Do buyer’s agents guarantee below-market purchases?
They cannot guarantee it, but agencies like House Finder specialise in sourcing properties with instant equity potential, often aiming for purchase prices below market value.
Can investors use buyer’s agents for interstate purchases?
Absolutely. This is one of the main reasons investors hire them—to safely purchase high-performing assets in other states without needing to travel.
How do I choose an investment buyers agent?
Look for an agent who specialises in investment properties (not owner-occupiers), has a track record of results, and operates in high-growth corridors.
Conclusion
The distinction between a buyer’s agent and a real estate agent is clear: one works for the seller, and one works for you. For investors, relying on a selling agent for advice is a fundamental strategic error. By engaging a professional whose sole incentive is to protect your capital and maximise your returns, you move from being a passive participant in the market to a strategic investor.
If you are looking to build a scalable property portfolio and want access to genuine off-market opportunities near Australia’s capital cities, professional representation is the key to securing value.
Ready to secure your next investment? Contact House Finder today to discuss how we can help you acquire high-growth assets.
