Just imagine how life-changing it would be if there were a friendly, knowledgeable professional on your side for all of the big decisions in life. When it comes to buying a house—there can be. When you first start to think about purchasing a new home, you can elect to work with a buyer’s agent to make the process so much more straightforward and painless. In this article, we’ll talk about what a buyer’s agent is and how it can make your home buying experience stress-free.
The Definition of a Buyer’s Agent
Buying a home isn’t naturally a straightforward or simple process. Especially for first-time homebuyers, the process of locating a home, negotiating with sellers, and going through the closing process can seem overwhelming and fraught with unknowns. That’s why it’s essential to have a knowledgeable buyer’s agent on your side during your home buying journey.
So just what is a buyer’s agent? The definition is pretty simple. Essentially they act as your guide during the process of finding the property you want to buy, and they work with your best interests in mind during negotiations and other steps in the home purchasing process.
What Are the Duties of a Buyer’s Agent?
Buyer’s agents have a crucial job to do, and that job is to make sure you get into a home that fits your needs, preferences, and budget. Due to that, one of their essential duties is to get to know you and understand how you’ll be evaluating the houses you look at together.
If you have a particular kind of neighborhood you want to live in, whether urban or suburban, they need to know that. Likewise, the agent needs to understand your budget and home preferences. With their knowledge of real estate, they can help you evaluate whether your house dreams are realistic.
Buyer’s agents’ exact duties will vary based on what level of advice and guidance you need. Other potential tasks that your buyer’s agent may handle include:
- Helping you get pre-qualified for a loan
- Locating potential houses and setting up appointments
- Being the voice of the buyer in talks with the seller and/or seller’s agent
- Guiding you through any necessary paperwork
- Negotiating with the sellers, including pushing for any necessary repairs
- Acting as a resource for any questions you have during the process
What a Buyer’s Agent Looks Like in Reality
Sometimes it’s easier to understand a concept like “buyer’s agent” when you have an example in front of you.
Imagine you’ve been living in a downtown apartment for a few years, but you’re starting to crave more open space for yourself, your partner, and your growing family. You’ve never bought a house before, and you’ve never lived in the suburbs of your area, so you choose to work with a buyer’s agent. You hear about a buyer’s agent that one of your work colleagues raves about for their recent home purchase. You’re smart, so you take this information and compare it to several others options you find through research.
The buyer’s agent takes time to learn who you are and what your must-haves are in a home, and they’re already knowledgeable about the local real estate climate. They help you find a home that’s within your budget but offers more space and a safe neighborhood. On top of that, they help you figure out how to get pre-qualified, walk you through the stacks of paperwork needed, and speak on your behalf in talks with the seller and seller’s agent. The process of getting a house still takes some time and might be confusing, but it’s much less so with a buyer’s agent on your side.
Difference Between a Buyer’s Agent and a Seller’s Agent
We’ve mentioned a seller’s agent in this article, so you may be wondering what that job entails and how it might come up in the homebuying process. A seller’s agent, or listing agent, represents the person selling their house, contrary to how a buyer’s agent represents the buyer. They help a seller get a property prepped for sale, including staging and pricing, and assist the seller in navigating the closing processes, among other duties.
Exclusive vs. Dual Representation
Now you know that a buyer’s agent's job is to represent you in the homebuying process; however, there are cases where they, or their brokerage company, don’t just represent you; they also represent the seller. This is referred to as dual representation or dual agency.
While dual representation can help make communication easier by removing an entire party from the equation, it can introduce a conflict of interest because the agent has to represent two groups that have almost opposite goals. Sellers want to maximize their profits, while buyers have a budget to stick to and want to keep costs down.
Additionally, because both sides have competing interests, dual agents can’t give helpful, complete advice to either side or act entirely in either side’s best interest. For these reasons, dual representation is generally frowned upon and even banned in a few U.S. states.
When it comes to real estate, “exclusive representation” can also refer to an agreement you come to with a buyer’s agent that you will work with them and them alone when looking for a house. Buyer’s agents may do this to ensure that the time and resources they’re spending on you are worth it.
Pros and Cons of a Buyer’s Agent
Before you go out and find a buyer’s agent, make sure you know both the pros and cons of going into this type of agreement. We’ll cover a few of the most salient points below.
Like we’ve mentioned already, a good buyer’s agent will essentially be your voice in the homebuying process. Other pros of working with a buyer’s agent include:
- They’re a dedicated resource for any questions you have—and you will have questions.
- They can see potential issues with properties before you do.
- They can help you get the best price and make the most of your hard-earned money. Who doesn’t want that?
- They know people—home inspection companies, mortgage lenders, attorneys, etc.—and can connect you when you don’t know where to turn.
Few things are ever truly free. Even if you’re not outright giving your buyer’s agent a check for their services, they do need to be paid. Typically the buyer’s and sellers’ agent commissions amount to about 5 or 6% of the home cost. Sellers pay this fee, but it’s also considered when pricing the home. That means that you, the buyer, will actually be paying those fees at the end of the day.
However, this is standard practice and should not necessarily dissuade you from working with a buyer’s agent. But in the interest of being well-informed, here are other potential cons to working with this kind of agent:
- You may be asked to complete a contract that guarantees the buyer’s agent commission from the home you purchase—though you can sometimes specify a timeframe with a distinct ending for this.
- It might be challenging to find an agent that gets you and what you need from a home.
- You might miss out on a slight home price decrease that you could get if you didn’t work with a buyer’s agent and didn’t need to guarantee their commission.
How to Find a Buyer’s Agent
If you were renovating your basement or adding an addition to your house, you wouldn’t hire the first contractor that came up on Google, would you? In the same way, it’s not the best idea to start a relationship with a buyer’s agent without doing any research or vetting. While friend and family suggestions can be great, it’s even better to pair those with your research into agents that specialize in the areas you like and have ample experience working with buyers.
Where to Go From Here
Working with a buyer’s agent is a smart and widely accepted step in buying a house. The right agent can deliver the knowledge and advice you need to locate the home of your dreams, sort through inspections, paperwork, and more, and guide you through to closing day. If you’re ready to kick off the home buying expedition, start doing your research to find a buyer’s agent that understands what you want and has a track record of placing other similar buyers in their own dream houses.
This page last updated: March 21, 2022