What Is a Buyer’s Agent, and What Makes a Good One?
Hanna KielarDecember 06, 2019
It’s time. You’re ready to jump in and buy a house. While you could try and do it on your own, when you think about it, there’s really no reason to. After all, the home buying process can get complicated, and while you’re no expert, you want to make sure you do it right by turning to someone who is. This will likely be one of the most expensive purchases you ever make, and the home you end up with will affect your quality of life (and that of your family) for the foreseeable future. That’s why it’s important to take measures to ensure you get it right. Fortunately, a real estate buyer’s agent can help ease the process.
What Is A Buyer’s Agent?
A buyer’s agent is a real estate professional who is legally licensed to represent the buyer and their interests in real estate transactions; that means they represent you, as opposed to a seller’s agent who has the seller’s best interests at heart. As a potential home buyer, signing a contract with a dedicated buyer’s agent is often the best way to ensure that your interests are protected.
As you might have noticed, real estate professionals go by a wide variety of names, which can be confusing. Read on to find out more about the manydifferent agent titles you might come across in the home-buying process.
Other Agent Titles And What They Mean
Real Estate Agents
While many people assume that anyone in real estate is a REALTOR®, that actually is a specific term that refers to someone who is a licensed real estate salesperson who belongs to the trade group National Association of REALTORS®. The term “real estate agent” is a blanket term that can apply to a buyer’s agent or a seller’s agent, depending on the context and their role in the process. However, bear in mind that a real estate agent who doesn’t specifically identify themselves as an exclusive buyer’s agent will often have the best interest of their firm and the sellers whose listings their firm holds in mind, so you may run the risk of receiving fewer objective property recommendations based on your needs as the buyer.
Seller’s Agents (aka Listing Agents)
A seller’s agent, often called a “listing agent,” is the one who is listing the property for the seller. In contrast to a real estate buyer’s agent, they are working for the seller, which means they have their best interests in heart. In other words, they’re trying to get the house sold, which means that their interests can be at cross purposes from yours – namely in terms of price. They want to get the most possible money for the seller, while a buyer is trying to negotiate the price down. That’s why it’s wise to pursue an agent who will be your best advocate during the home buying process.
Sounds like a spy term, doesn’t it? Dual agency means that the agent can work as a buyer’s agent and seller’s agent in real estate transactions. As you might imagine, that doesn’t always work in your favor. After all, if the agent is handling affairs on both sides of your transaction, you might not get the same level or quality of service as you would if you had someone who was solely representing you. That’s because the agent will need to strike a balance between your interests and the seller’s interests.
An exclusive agent is the opposite of a dual agent: They are working for just one side of the transaction. An exclusive agent could be exclusively a buyer’s agent or a seller’s agent, either one. That’s why you might want to consider this arrangement as the best option when choosing your buyer’s agent, since an exclusive agent will be working solely on your behalf and will make your needs their top priority.
What Does A Buyer’s Agent Do?
In real estate, a buyer’s agent assists potential home buyers with all aspects of the process of buying a home, from start to finish. First and foremost, they can help you find homes that suit your needs and preferences. That might include flagging listings or open houses for you to check out, and then they will schedule showings on your behalf.
Once you’ve located your ideal property, they can also write offers for homes you would like to buy, assist with inspections and negotiations, and guide you through the closing process. Essentially, a buyer’s agent will serve as your go-to resource for anything related to buying a home.
Why You Need A Buyer’s Agent
If you think the home buying process will entail just looking at a couple of properties and making a decision, you should think again. In fact, it can prove to be far more complicated and stressful than you would imagine, and it can be much easier with an advocate by your side. That’s why you should plan to hire a buyer’s agent, as there are a number of ways an agent can make buying a home much less of a headache.
They’ll Get You In The Door
An important aspect of a buyer’s agent’s job is to provide you access to homes that interest you. Your agent will take into account your key home buying wants and needs, then work with you to narrow down the houses that fit your search criteria. Once you’ve found properties that you’re interested in, they will act as a liaison between you and the seller or seller’s agent to set up appointments for you to get a first look at those houses.
They’ll Have The Tough Talks
Remember, this is likely the first time you’ve been in this position, and there can be a number of nerve-wracking parts of the home buying process. One of the most often-cited is when a buyer has to have hard conversations with the seller about improvements you expect to be made to the home before finalizing the transaction. Fortunately, this is where having a buyer’s agent working on your behalf comes in handy, as they are used to these conversations and can handle them with aplomb.
For example, did you or your inspector notice a leaking water heater or cracked window? You might not be sure of the best way to negotiate with the sellers to get that fixed, but your buyer’s agent is a pro and can guide your negotiation, including ultimately contacting the sellers regarding any repairs or changes in price that you request.
We spoke to Jeff B., who was buying a home in Ohio and trusted his buyer’s agent to negotiate a price after finding out that the home’s furnace was almost 40 years old. “My buyer’s agent was able to negotiate a $4,000 drop in price on the home due to the age of the furnace, which I doubt I would have been able to negotiate on my own,” says Jeff.
They’re The Problem Solvers
A buyer’s agent will be there throughout the home buying process to protect all of your interests and take on any issues that may arise. Ashley G. from Michigan told us that she was interested in a house but worried about costly repairs that might pop up the minute she took possession, due to an older roof and water heater.
“We couldn’t negotiate for a new roof or water heater because they were technically A-OK, but my buyer’s agent was able to get the sellers to purchase a one-year home warranty that would cover the cost of any sudden problems that might arise,” explains Ashley. That peace of mind is a huge reason that a buyer’s agent is so important.
They’re On Top Of The Paperwork
If you’ve ever gone through the process of buying or selling a home, you know there is almost endless paperwork that can often get confusing. Buying a home involves various types of documentation including:
● Preapproval letters
● Disclosure statements
● Offer letters
● Inspection reports
● Purchase agreements
● Bill of sale
● Title paperwork
● Loan application
Your buyer’s agent can help make certain that important documents are not overlooked and can also walk you through each one in order to make clarifications on any details that aren’t clear to you, as well as give you the information you need to complete them properly. With a buyer’s agent by your side, you’ll never have to worry about signing on the dotted line without truly understanding what each paper means.
They’re On Your Side
While it may be tempting to contact the listing agent when you find a seemingly perfect house online, it’s important to remember that the listing agent is acting in the best interest of the seller, not you. A buyer’s agent will be there to represent your best interests, ensuring that you make a competitive offer on the right house for you and your family.
They’re The Expert
As an experienced professional, your buyer’s agent will have specific skillsand bring a level of expertise that will make the entire home buying process run more smoothly. For example, if you and your family decide you like a house but want to know more about the school district or commuting options, your buyer’s agent will have that information. They then can help you make a fair offer given prices on comparable houses. You can rely on them to get you the information you need to help you feel confident in your investment.
They Can Work For You Long-Term
The best thing about finding a buyer’s agent you trust is that you can use them again and again. Even after you’ve found a home that checks the boxes for what you and your family currently want and need, it can be wise to stay in touch with your agent beyond the closing in case you decide to move again in the future. By forming an extended relationship with your buyer’s agent, they’ll be able to develop a stronger sense of what kind of house would be ideal for you and direct you toward listings that better reflect your needs the next time you want to look for a home.
What Makes A Buyer’s Agent Good?
Now that you know why you should consider a buyer’s agent, you’re probably wondering how to find one who will do the best job for you. Because hiring a buyer’s agent in general will leave you better equipped to buy a home, there are traits that some buyer’s agents have that set them apart from the rest in terms of their ability to provide clients with excellent service.
They Place Focus On Your Needs Rather Than Their Payday
Regardless of whether or not they’re “exclusive,” a good buyer’s agent ultimately strives to satisfy the needs of the homebuyers they work with and to make sure that their clients end up happy with the house they choose – and the price they pay for it. They’ll also be excellent negotiators on a buyer’s behalf and work hard to make sure that the buyer receives the best deal possible on their chosen home, taking into account such factors as days on market and comparable prices to make sure you’re not overpaying.
The Terms Of Your Relationship Are Clear
When you choose to work with a buyer’s agent, you will need to sign a contract called the “Buyer Agency Agreement.” Among the factors that the agreement would include are: the amount of time you’ll be working together, the services they’ll provide and the cost of their services. If you’re hiring an exclusive buyer’s agent, it should be plainly stated that your relationship is exclusive; in other words, they won’t be working on the seller’s behalf as well. A good buyer’s agent will not try to swindle you in the fine print of the contract, although buyers should still always read the fine print to be safe. Make sure your terms are clearly defined and easy to refer to.
They Connect You With Other Professionals
Your agent is just one in the cast of characters that you need for a smooth real estate transaction. You’re also likely to need a mortgage broker, title company, home inspector and contractor to perform any needed improvements. You may also need a reputable moving company. A well-connected buyer’s agent can recommend professionals who will offer high-quality service at reasonable rates so you don’t have to start from scratch lining up these other services that you need.
How Much Does It Cost To Hire A Buyer’s Agent?
With all this service, you are likely wondering how much you will be paying for all this attention. Here’s the amazing news: As the home buyer, if the agent you choose is an exclusive buyer’s agent, it shouldn’t cost you any additional money (beyond what you’ll already be bringing to the closing table). But don’t worry, they’ll still be paid. That’s because the seller typically covers all the seller and buyer agent commission, which is split evenly between your agent and the seller’s agent. A commission averages 2.5% – 3.5% of the home’s sale price for both of the agents once it’s divided between them.
How To Find A Buyer’s Agent
So with all this good news, you’ll want to run, not walk, to find a real estate buyer’s agent. If you’re wondering where to start, the best place is always with friends and family who might have an agent recommendation for someone. You also can browse local online listings and see what names pop up, then do some research and read through reviews from prior clients. Before you engage a buyer’s agent, make sure you have done due diligence that includes checking agents’ records on their state’s Department of Real Estate website, as well as consulting the NAEBA website.
Now that you know more about buyer’s agents, you’re probably feeling far more confident about jumping into the home buying process. After all, there’s no replacement for having someone who’s working exclusively for you and has your best interests at heart. And the fact that all that amazing service comes free of charge? Icing on the cake!