A buyer’s agent is a real estate agent who represents and guides homebuyers through the process of purchasing a home.
A good buyer’s agent shows you properties that match your criteria, helps you submit a competitive offer, negotiates price and terms on your behalf and supports you throughout the home buying process.
Homebuyers technically do not need to use a buyer’s agent to purchase a home. But using an agent is highly recommended, and the seller usually covers the buyer’s agent commission anyway.
What is a buyer’s agent?
There are usually two agents working on opposite sides of every real estate transaction: a buyer’s agent and a listing agent.
A buyer’s agent or selling agent is a real estate professional who represents the home buyer in a transaction. They work opposite of a listing agent or seller’s agent.
Using a buyer’s agent to purchase a home is very common: 87% of all buyers used an agent to assist in a transaction, according to the National Association of Realtors.
Some real estate agents work as buyer’s agents exclusively. Others work as either a buyer’s agent or listing agent depending on the transaction, while some prefer to work only with sellers.
» LEARN: How to find a good buyer’s agent
What does a buyer’s agent do?
Buyer’s agents work with their clients from the initial interview and first house showing, right up through closing day.
Here’s what a buyer’s agent usually handles in a real estate transaction.
Walk you through the home buying process
For first-time home buyers, a good agent won’t immediately take you to see homes without first walking you the buying process.
It’s smart to get a complete overview of the home buying process at your initial meeting, so you know exactly what to expect from the process. A buyer’s agent can walk you through:
- The state of your local real estate market and how it’s impacting home buyers.
- Your potential out-of-pocket costs on items like home inspections and appraisals.
- How long it might take you to find and close on a home.
- Potential pitfalls, including common home inspection issues and negotiation tactics.
- Required paperwork required to close on a home.
Determine a budget
Buyer’s agents can connect you with lenders for mortgage pre-approval before your home search begins.
There are three key benefits to securing a mortgage pre-approval early in the process:
- It helps you determine much home you can comfortably afford, in terms of the price of the house, down payment amount, and monthly payments.
- You can discover the best loan program for your situation – conventional, FHA, VA, or a USDA loan, for example.
- It can give you a competitive edge over other buyers. Including a loan pre-approval letter with an offer strengthens it, as it shows you are a ready, willing, and able buyer.
Getting pre-approved for a mortgage is often fast, easy, and free, and you don’t need to commit to the lender you use to obtain one.
Learn more about top neighborhoods
A good buyer’s agent is a neighborhood expert and has an inside scoop on the quality of schools, neighborhood amenities, traffic patterns, taxes, zoning, and other hot button issues.
This type of local information can help you determine the best neighborhoods to zone in on before you set up showings.
Find houses that match your criteria
A buyer’s agent can help you find the best homes and give you the inside scoop on properties before viewing them in person.
Buyer’s agents set up clients on the multiple listing service (MLS): the database all agents and brokers list houses on.
The MLS is generally more accurate and up-to-date than public real estate sites like Zillow and Realtor.com. It also makes it easier for agents to pull property details quickly, like tax records, HOA fees, and utilities.
A good buyer’s agent helps you narrow down your search on the MLS and sets up showings on your top choices, ultimately saving you a lot of time and stress.
Evaluate properties, and help you submit offers
Your buyer’s agent does much more than just open the front door for showings.
The showing walkthrough is where an agent points out each home’s key features, possible repair and deferred maintenance issues, and anything else that may be important to you.
To determine each home’s estimated value and to guide your offer price, a good buyer’s agent will complete a comparative market analysis (CMA) report.
Finally, a buyer’s agent recommends what contingencies to include in your offer. A contingency allows you to back out of the contract or renegotiate price if a major issue is discovered.
Standard contingencies include home inspection, financing, and appraisal.
Connect with other real estate professionals
A successful home purchase involves many real estate professionals, including inspectors, appraisers, attorneys, title companies, and lenders.
Buyer’s agents can refer you to several highly-rated professionals to assist with your purchase. These connections can save you time and stress, as you won’t need to search for help on your own.
Keep in mind that your agent’s recommendations might not be the cheapest option available. Consider shopping around for professionals like home inspectors and lenders to compare prices, if you have the time.
Meet contract deadlines, and close the deal
After your offer is accepted, the buyer’s agent work is just getting started. The agent is usually responsible for handling the following tasks:
- Making sure you submit earnest money in a timely manner.
- Setting up your home inspection, termite inspection, and appraisal.
- Gathering documents and sending them to the attorneys.
- Meeting all contracting deadlines.
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Should I use a buyer’s agent? Pros and cons
You technically can purchase a home without using a buyer’s agent, but it doesn’t make much sense to do so.
In most markets, the seller covers the buyer’s agent commission rate, so using a buyer’s agent shouldn’t cost you anything.
You can buy a house directly through a listing agent by calling the number on the listing, but it’s extremely risky. A listing agent works for the seller and probably won’t have your best interests in mind.
Here are some of the pros and cons to using an exclusive buyer’s agent.
You have an expert in your corner
Buyer’s agents are licensed real estate pros who can walk you through the entire home buying process, answer any of your questions or concerns, and ensure your transaction runs as smoothly as possible.
An experienced buyer’s agent can help you avoid overpaying for a property, negotiate price and terms in your favor, and avoid common first-time home buyer mistakes.
Access more relevant homes
A buyer’s agent sets you up on the MLS and sends you homes that match your criteria.
For example, whenever a new home comes to the market on the MLS, you should get alerted via email instantly. This can help you beat out other buyers who are relying on slower, outdated home search websites.
A good buyer’s agent may also have access to off-market properties. Also called “pocket listings,” these homes aren’t available to the public and can provide additional options for you.
Get alerted to red flags
Part of a buyer’s agents job is pointing out reasons not to buy a property. They can provide you with seller property disclosures, and rely on their own expertise to point out any potential red flags or issues.
For example, a home might have past flooding issues, an old roof, unpermitted renovation work, sky-high HOA fees, or termite damage.
Protect your best interests
A trustworthy realtor protects you by knowing which contingencies to request in the contract.
For example, a home inspection contingency gives you the right to back of the contract or renegotiate price if your inspector finds certain issues. An appraisal contingency means the home has to appraise for the amount you’ve agreed to pay for it, or you can walk away.
It may cost you money (sort of)
The seller often pays the entire buyer’s agent commission. The fee often ranges from between 2% to 3% of the home’s sale price, paid out at closing.
You don’t pay this fee. However, you might be able to negotiate a lower price if you buy a home without using an agent, since the seller avoids paying the 2% to 3% fee.
It’s still very risky to buy a house without using a buyer’s agent, and there’s no guarantee you’ll be able to negotiate a lower price with a seller.
You may need to commit to one agent
While the rules vary by state, some buyer’s agents may require you to sign an exclusive buyer’s agency agreement, which locks you into using them for a certain period of time.
Problems can also arise if you sign a buyer’s agency agreement but then go use another agent to purchase a home. If this happens, you may owe the first agent a fee, depending on what’s stated in the contract.
However, getting out of a buyer agency agreement is usually pretty easy. Most agreements spell out how you can break or cancel your contract, and it usually doesn’t cost you anything.
Buyer’s agent vs. seller’s agent: What’s the difference?
|Represents the home buyer
|Represents the home seller
|Paid from the proceeds of the sale
|Paid from the proceeds of the sale
|Helps the buyer find a house that meets their needs
|Helps the seller market their home
|Submits offers on behalf of the buyer
|Reviews offers with the seller and responds with acceptance, rejection, or counter offers
A buyer’s agent or “selling agent” represents the buyer, while a listing agent or “seller’s agent” represents the seller.
Most agents work as buyer’s agents and seller’s agents, but some work exclusively with buyers or sellers. Ultimately, both agents want the sale to close without any issues so they can earn a commission check.
Sellers typically pay commission for both agents, with commission paid out from the proceeds from the home sale.
What is dual agency?
In some rare cases, an agent can work as both a buyer’s agent and a listing agent in the same transaction, earning a double commission paycheck. When this happens, it’s called dual agency.
Dual agency is considered risky because it creates a conflict of interest. After all, how can your agent protect your best interests when they are also working for the seller?
Given the potential conflicts of interest and confidentiality concerns, it’s best to avoid dual agency whenever possible.
The practice is also illegal in several states (Alaska, Colorado, Florida, Kansas, Oklahoma, Texas, Vermont, and Wyoming.)
How to find a buyer’s agent
Use an agent matching service
An agent matching service matches you up quickly to several top local buyer’s agents to compare your options. Most of these services have strict screening criteria for agents who want to join the network.
Some companies may even provide you with savings. For example, we offer cash back after closing on eligible home purchases.
Agent matching services are free to use, with no obligation to work with any agent you’re matched up with. It’s worth connecting with a local real estate pro for free advice, even if you don’t end up using their services.
Ask for referrals
You can also ask family, friends, neighbors, or co-workers for realtor referrals. Getting a referral from someone you know and trust can lead to a good match.
However, this strategy only works if the referrer recently bought a home and had a good experience with the agent. There’s also no guarantee the agent will be a good fit for your particular situation.
Be sure to vet the agent before meeting with them. Ask your referrer how the transaction went, the location and type of home purchased, the agent’s communication style, and any red flags to watch out for.
The internet has made finding a real estate agent easier than ever before. Popular real estate sites like Zillow have useful agent finder tools that allow you to search for agents by city or zip code.
However, literally thousands of realtors in each major city means searching for buyer’s agents online can be pretty overwhelming. We recommend using online search to vet agents you found elsewhere, rather than finding an agent.
» MORE: How to find a realtor for buyers
FAQs about buyer’s agents
What does a buyer's agent even do?
A real estate buyer's agent does quite a lot.
The typical agent will walk you through the entire process of buying a home, help you get pre-approved for financing, create an MLS search for your dream home, set up showings, write up an offer and purchase contract, connect you to local real estate professionals like home inspectors to assist with the purchase, and get you to the closing table.
Learn more about what a buyer's agent does and why they are worth hiring.
What is a typical buyer's agent fee?
Most real estate agents charge between 2% to 3% of the home's final sale price. Combing with the listing agent commission, it costs sellers between 5% to 6% to sell a home. In most cases the seller covers the buyer's agent commission, so you don't have to pay anything at closing.
Do I really need a buyer's agent?
Most home buyers benefit from hiring a buyer's agent. A buyer's agent is a local market expert who can help you find a house that meets all of your criteria. The right buyer's agent can also negotiate price and terms in your favor, and protect your best interests.
What are the disadvantages of using a buyer's agent?
There are very few disadvantages to using a buyer's agent. One potential risk: You may have to sign an exclusive buyer's agency agreement, which locks you into using that agent for a certain period of time (usually 6-12 months).
However, most agents will let you get out of a contract without penalty if you're unhappy with their service. They'd rather lose your business than risk a negative review and tarnished reputation.
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