Buyer’s Agent: How Do I Find A Good One?
Whether you’re hunting for a starter home or your forever abode, buying a home can feel challenging at times. Thankfully, real estate agents can help make the process less daunting. As a buyer, you’ll want to find a buyer’s agent who can help you find your perfect home. But what is a buyer’s agent and how do they differ from listing agents?
Let’s look at the difference between these two types of agents and discuss how a buyer’s agent can help you purchase a house.
What Is A Buyer’s Agent?
A buyer’s agent is a real estate professional who guides home buyers through the process of purchasing a home. As a purchaser's representative in a real estate transaction, a buyer’s agent has a legal obligation to protect the buyer’s interests and work to ensure they’re getting the best deal possible. Although some real estate agents specialize in working with buyers, most can work as a buyer’s agent or listing agent, depending on the specific transaction.
Buyer’s Agent Vs. Listing Agent
Two real estate agents are usually involved in a real estate transaction: a buyer’s agent and a listing agent. Both are often referred to as real estate agents or REALTORS®. The buyer’s agent works on behalf of the buyer, while the listing agent represents the seller’s interests.
A buyer’s agent will help the buyer navigate the real estate landscape by finding listings and advocating for the buyer’s needs. A listing agent is responsible for listing a seller’s property. Also referred to as a seller’s agent, a listing agent has a fiduciary duty to look out for the seller by securing the best terms possible for the seller’s property.
Buyers often find a property they like and work with the listing agent to negotiate the sale instead of hiring their own agent. While this type of dual agency is sometimes possible, it’s discouraged because it can lead to a conflict of interest. When it’s time to negotiate, it can be difficult for one agent to be loyal to both parties in the same transaction.
Buyers and sellers inherently have distinct interests, especially regarding the purchase price. In some states, dual agents are illegal, so it’s important to understand your area's real estate laws.
What Does A Buyer’s Agent Do?
A buyer’s agent is a real estate professional who serves as a resource for their clients, guiding them through every step of the home buying process. As a result, a buyer’s agent generally takes on the following tasks:
At the beginning of the home buying process, your agent will ask you about your needs and preferences so they can be on the lookout for your ideal home. Your buyer’s agent will use this information to search for appropriate properties. As new listings enter the real estate market, the agent will send properties that match your needs.
You can peruse the listings your agent sends and pick out the ones you want to see in person. The agent will coordinate with the respective listing agent, or sellers if the home is for sale by owner (FSBO), and schedule a time for you to tour the property. The buyer’s agent will also inform you of any open houses you may be interested in attending.
Attending Showings And Open Houses
The buyer’s agent will typically join you at showings and open houses you’re interested in. As buyers tour the property, the buyer’s agent answers questions and offers thoughts about the property based on their expertise. Your agent will ask the listing agent (or FSBO seller) questions to gain insight into the seller’s circumstances, the property’s condition, taxes and more.
Advising On Purchase Price
Once you find a property you’re interested in, your buyer’s agent will ask the listing agent if there are any disclosures on the property (potential issues a seller must reveal to buyers). A disclosure may affect the home’s desirability or pricing. Then your agent will run a comparative market analysis (CMA) to determine an appropriate offer price for the property based on similar properties that recently sold in the area. Based on their research and the current market, your agent will recommend an offer price based on the specifics of the property.
Negotiating With The Listing Agent Or FSBO Seller
After making an offer on your behalf, your buyer’s agent will negotiate both the purchase price and terms. The agent will keep you up to date on any counteroffers made by the seller and advise whether to accept or amend them. Your agent will also recommend strategies to make your offer more competitive, such as eliminating contingencies or adjusting your closing date. As soon as the seller accepts your offer, the buyer’s agent will work on drafting the contracts.
Recommending Other Real Estate Professionals
Your buyer’s agent will guide and advise you through closing, but you’ll likely need to consult with other real estate professionals. Your buyer’s agent may refer you to real estate attorneys, home inspectors and more to help ensure your interests are protected.
Who Pays A Buyer’s Agent?
Typically, the seller pays the real estate commission for both the buyer’s agent and the listing agent. How real estate agents get paid is important to understand because you get the benefit of working with the buyer’s agents for free. If you don’t purchase a home, the buyer’s agent doesn’t get paid.
Unless there is a different arrangement in the sales contract (or exclusive agreement between agent and client), the commission is 6% of the purchase price and split evenly between the listing agent and buyer’s agent. The seller technically pays for both agents because their fees are deducted from the proceeds of the sale.
For example, if the home purchase price is $400,000, 6% (or $24,000) would be withdrawn from the seller’s net proceeds to pay the commission of both agents. The buyer’s agent and the listing agent would each receive $12,000, and the seller would walk away with $376,000, less any necessary taxes and costs.
Can You End A Contract With A Buyer’s Agent?
Because buyer’s agents only get paid if you close on a new home, some agents insist that buyers sign a buyer’s agency agreement to solidify the working relationship. The contract details the terms of the relationship and ensures that the buyer works exclusively with the agent to purchase a new home.
You can hire a different agent if you haven’t closed on a new home by the time the contract expires. However, you should read the terms of the buyer’s agency agreement carefully. Some contracts stipulate that the agreement renews automatically at the end of 3 months.
If you don’t see eye to eye with your agent, your ability to end the contract could be limited by the fine print. You may have more flexibility in terminating the contract if your agent fails to perform any duties listed in the agreement.
To ensure you don’t get stuck working with an agent you don’t feel comfortable with, try negotiating for a trial period. While some agents may refuse, it’s always worth asking whether you can add a 30-day or 60-day opt-out period to the agreement.
How To Find A Buyer’s Agent
Given their expertise, there’s no question buyers should work with a buyer’s agent. However, you may wonder how to find a buyer’s agent who’s right for you. Some agents work exclusively with buyers, but most don’t. So how do you decide who will represent you best?
Ideally, your agent has experience finding homes in your desired location and price range, and they make you feel comfortable. To help you find your perfect buyer’s agent, you should ask potential real estate agents the following questions:
- How long have you been working in the industry?
- What are the hours you typically work?
- Do you specialize in working with buyers?
- How many different buyers and sellers are you currently working with?
- What experience do you have finding homes in my desired location and price range?
What do you bring to the table that other agents may not?
When describing your ideal home to potential agents, consider how well they understand your needs and preferences. The right agent for you will be someone who gets you and gets the industry.
FAQs: Buyer’s Agent
Let’s take a look at some common questions about buyer’s agents.
Why do some buyers choose not to work with a buyer’s agent?
Usually, the choice not to use a buyer’s agent comes down to money. The standard 6% commission fee gets split between the listing agent and the buyer’s agent. By not hiring a buyer’s agent, you can avoid the possibility of the seller increasing the cost of the home to compensate for paying the buyers agents’ commission.
Real estate agents used to be the only way home buyers could access information about homes on the market. Today, you can find property details online, including house listings, sales prices, crime rates and more, With easier access to information, some buyers opt to house hunt on their own on their own and try to save money by avoiding agent commissions.
When should I hire a buyer’s agent?
Narrowing your home search before hiring a buyer’s agent can be beneficial because it lets you see current market trends – but it’s not always necessary. We recommend recruiting a buyer’s agent as soon as you find an agent who is the right fit because it can help make buying a house more manageable. Regardless of how much research you do, a buyer’s agent will have the experience and resources to help you get the best deal possible.
Can a seller refuse to pay the buyer’s agent?
In most cases, the seller pays the commission of both the seller’s agent and the buyer’s agent. If a seller wants the buyer to pay the buyer’s agent’s commission, they must negotiate with the buyer and come to an agreement. The purchase agreement outlines who pays the agent’s commission. Both parties will sign an agreement at the beginning of the real estate transaction.
The Bottom Line
Buyer’s agents work as your representative throughout the home buying process. They offer professional insights, protect your best interests and help you negotiate the best possible deal on your new home. Having a buyer’s agent at your side can help simplify buying your next home.
Looking for a home and not sure where to start? Find a real estate agent with Rocket Homes℠ and start your home buying journey today.