Nine out of 10 home buyers choose to use a buyer’s agent to assist in their home search, according to the National Association of Realtors. Learn more about how a buyer’s agent can help you find your next home.
What is a Buyer’s Agent?
You’ll find 2 types of agents in a real estate transaction: a buyer’s agent and a seller’s agent. The buyer’s agent represents you, the home buyer, while the seller’s agent, also known as the listing agent, represents the property seller.
Some agents work solely as a buyer’s agent or a seller’s agent but most realtors work with clients on both sides of the transaction.
Buyer’s agents have several key responsibilities:
- Buyer’s agents find homes that fit your needs and show you the properties you’re interested in.
- Agents use a database of property sales and real estate information called the multiple listing service (MLS) to search for homes that could be the right fit for you. However, in order for sellers to have a home inputted into the MLS, they need to have hired a licensed realtor.
- The buying agent is responsible for all the negotiations that precede the sale of the property. These negotiations start with submitting a purchase agreement, also known as your offer. This includes the price you’re willing to pay, how you’ll transfer your funds, closing dates and any items in the house you want to include in the sale.
- After your offer gets accepted by the seller, the buyer’s agent is responsible for negotiating the inspection and appraisal on your behalf. Inspection negotiations happen after a formal inspection is conducted on the property under contract. During negotiations, the buyer’s agent will either request broken items to be fixed or ask for a closing credit to account for the broken items. Although buyers don’t typically get concessions for everything wrong with the home, concessions are typically given for substantial problems with the property, such as roofing, electrical or HVAC problems.
- If the buyer and seller cannot come to an agreement after the inspection, then they will sign a mutual release, which voids the purchase agreement.
- You’ll undergo appraisal negotiations between the buyer and seller before you close on the property. Most lenders will only lend a percentage of the appraised value, so borrowers rely on the appraisal being at or above the purchase price. If the property doesn’t appraise for the purchase price, it’s the realtor's job to negotiate a new purchase price that both parties can agree on.
How to Find a Buyer’s Agent
How do you find the right buying agent for your personal needs?
Find a local agent to help you purchase your next home. Online referrals are great, but make sure to vet the agent by asking for an interview. You can also find a realtor through referrals from friends or family. If they’ve had good experiences with a certain agent, it’s likely you’ll have a similar experience.
A less traditional approach to finding a buyer’s agent is to use the seller’s agent on a property you are interested in. The biggest benefit in doing this is that the listing agent may be able to cut the commission to get you a cheaper price for the home. This is because the listing agent would be paid a total of 6% commission –– 3% on the buyer side and another 3% on the seller side, so they have more “room” to negotiate their commission.
However, some agents won’t cut their commission to make a deal happen, and a conflict of interest sometimes arises if the agent represents both the buyer and seller in the transaction.
Should You Choose an Agent Based on Commission?
You shouldn’t consider the buying agent’s commission when starting your home search. As mentioned, the seller is responsible for paying the buyer’s agent, and this commission is almost always a standard 3%.
What to Look for in a Buyer’s Agent
Look for an experienced buyer’s agent who has a good reputation in your area. Find out not only the number of homes an agent has had under contract, but how many of these properties actually closed. This is important because agents who have high closing rates generally negotiate the terms of the purchase agreement more successfully and close deals more often.
Look for local agents who sell in neighborhoods you want to buy because they offer the most knowledge on the specific properties in your area.
Get the Best Buyer’s Agents in Your Area
Don’t know where to start your search for a real estate agent? Create a list of 2 to 4 buyer’s agents to interview in order to find the best realtor for the job and check Benzinga’s list for the best buyer’s agents in your area.
Hire Your Buyer’s Agent
Once you’ve picked 2 to 4 agents who you think would do a good job assisting you with your home search, it’s time to conduct interviews. Conducting interviews with real estate agents is not common practice but generally accepted. Interviewing prospective agents gives you an idea of how the realtor approaches your home search and gives the realtor an idea of what you’re looking for. Your realtor can then guide you toward neighborhoods that fit your needs and budget.
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