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What a Buyer’s Agent Can Do For You

When it comes time to buy a new home, you need to know whom you can trust. Real estate is a cutthroat business, and as a prospective home buyer, you should recognize that the real estate agents who list properties are working for sellers—they’re salespeople, and they’ll push hard to sell their clients’ homes. Not to say there aren’t agents out there that tell it like is, even while working for a seller. But you’ll want to be prepared for the ones that don’t.

That’s where enlisting a buyer’s agent can be a wise move.

What Real Estate Agents Do

Historically, real estate agents work for sellers, not buyers. Agents list sellers’ properties, market the listings, and really sell the homes. When they’re successfully, the earn a commission based upon a percentage of the sale price. The more the buyer pays, the more the agent earns. Agents will do everything that’s legal to sell homes. It’s their job.

For novice home buyers unfamiliar with real estate laws and the numerous problems properties may have, a buyer’s agent can help shed light on the actual pros and cons of different homes.

A buyer’s agent may also help you negotiate a lower price, but watch out—buyer’s agents usually split the commission with the seller’s agent, so they have an interest in a higher selling price too. Like the seller’s agent, your buyer’s agent is going to want to see you buy a home; his or her paycheck depends on it.

Finding a Buyer’s Agent

If you decide you want a buyer’s agent to help you navigate your first home buying experience, start asking friends for referrals to agents they’ve worked with and trust. If that doesn’t work, call up local real estate companies and ask to schedule brief “interviews” with prospective buyer’s agents. Ask prospective agents how much experience they have working as buyer’s agents and working with the kinds of properties you’re interested in.

Whatever you do, make sure you choose an agent that you like and trust.

When my wife bought her first condo a few years back, she jumped into the market without a buyer’s agent. Soon, a seller’s agent for a property that didn’t interest her latched on and got my wife to use him as her buyer’s agent. The agent did a lackluster job, but probably collected a sweet commission check for it anyway. My wife was probably better off with him as her buyer’s agent, but could have been even better served had she hand-selected the agent she worked with.

On the hunt for a new home? Check out 10 Tips for Hassle Free House Hunting and don’t forget to get mortgage pre-approval before you start your search.

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

Comments

  1. Hi David,

    Good insight and description of what a buyer’s agent offers!

    We are closing on our first home in two weeks. Being newbies, we visited the National Association of Exclusive Buyers Agents http://www.naeba.org/ in hopes of finding someone who would look out for our best interests. It took them about a week to get back to us, and by that time, we had already visited with one of Dave Ramsey’s endorsed local providers.

    It sounds like your wife had a less than great experience. However, our agent is wonderful and if nothing else, has been a great resource assuring us that we are covering all of our basis.

  2. David Weliver says:

    Thanks for sharing your story and for the link to that group, I hadn’t heard of them.

    My wife’s experience was less-than-perfect; but all worked out in the end. We know now that when it’s time to move we’ll take a little more time to find a great buyer’s agent.

  3. Howdie David,

    Good topic you have here. After buying several properties with buyers agents over the past 10 years, I’m no longer ever going to use a buyers agent b/c I understand real estate contracts, and buyers agents cost 2.5%!

    For numbers sake, if I use a buyers agent on a property I like, the selling agent has to pay the buyer’s agent $25,000. I’d rather go at it alone and negotiate with the sellers agent $20,000 or $25,000 off.

    On the flip side, I think having a seller’s agent is absolutely CRUCIAL partly due to their connections.

    Hope to see you at Financial Samurai one day. BTW, if you know anybody who’s looking to apply to b-school (given your demographic) pls let them know we’re doing a $1,000 giveaway!

    Best,

    FS

  4. Hi David,

    Thank you so much for your article. It’s amazing that many potential home buyers (especially with first time home buyers) don’t truly understand the importance of a buyer’s agent.

    A few things to mention: make sure that your buyer’s agent is a full-time REALTOR. By having a REALTOR on your team we (yes, I am a REALTOR) are required by our code of ethics to hold our client’s interested above our own – meaning that we’re working hard to get you the best price and package that we can.

    You also want to make sure that you get along on a personal level with your REALTOR. They don’t have to be your best friend but you will be spending many hours with this person (many stressful hours for most). And if you don’t like your REALTOR as a person it will make the situation that much more stressful.

    Make sure you know the credentials of your buyer’s agent and get referrals. Not only do you have to like them but they have to know what they are doing.

    But, remember to enjoy the process as well. Buying a home is very exciting – remember to let it be!

  5. Consulting a home buyer agent is very important. Investing in real estate is a big decision that could affect and influence your life. Therefor, it is important to seek and ask professional advice from home buyer agents.