Updated May 15th, 2019
If you're hoping to buy a home soon, then you're not far away from hiring a buyer's agent. Picking the person who helps you find the home of your dreams is a very important step in the process.
Here is everything you need to know about buyer's agents. We'll tell you who they are, what they do, and how to find a good one.
What is a buyer's agent?
A buyer's agent is a fully licensed real estate agent that represents the buyer in a real estate transaction. The nice thing about a buyer's agent is that as a buyer, you do not have to pay them. The seller of the home you purchase pays their commission for you.
So basically, the seller pays the buyer's agent commission. In a typical home sale, the commission is 6%. So, the agents work together.
The agent who represents the seller takes 3% and then splits the commission with the buyer's agent.
However, if you use a discount broker like Clever, the sales price does not impact the commission. Instead, the seller's agent sells the home for just one flat fee.
What does a buyer's agent do?
The job of a buyer's agent is to find a home for their client. It is their fiduciary duty to listen to you and help you find a home in your price range. This means that it is their legal and ethical responsibility to avoid potential conflicts of interest.
Here are a few terms to know, just to keep things straight:
- Buyer's agent: the person representing the homebuyer in the transaction.
- Listing agent: the person who lists the home of the seller on the market.
- Selling agent: usually the same person as the listing agent. This is the person who represents the seller and sells the home.
Now, although the selling and listing agent are usually the same person, it is not a good idea for the buyer's agent and the selling agent to be the same person. This is called a conflict of interest. In the real estate industry, it is also called a dual agency. The reason this is not a good idea is that it is impossible for the agent to really have both parties' best interests at heart.
This is because the seller always wants as high a price as possible, while the buyer wants a bargain. If the same person represents both parties, they can never reach an effective compromise.
How to Find a Good Buyer's Agent
A good way to find someone that you trust to represent you is to start by asking family and friends about their experiences with Realtors. If they have someone that they already know and trust, then it is likely that this person could be a good fit for you as well.
However, if you're moving to a new area or have significantly different needs than your friends and family, then it is possible that you'll need to look elsewhere. Online companies like Clever are a good place to start.
Before committing to work with a buyer's agent, you should always meet with them in person, or at least speak to them on the phone.
You want to make sure that their personality and communication style is a good match for yours. It doesn't matter if they sell a thousand houses a year if they make you feel uneasy or pressured—although a good sales record is definitely a good sign for an agent.
You can also look into exclusive buyer's agents. These are Realtors or firms who exclusively introduce buyers into sales; they never actually sell homes themselves.
Top 10 Questions to Ask a Buyer's Agent
In order to find a gem, here is what you should be asking before you hire anyone:
1. Are you fully licensed?
You don't want to be working with someone who does this as a hobby. You want to work with someone who is a full-time Realtor and licensed by the National Association of Realtors.
2. What is your experience in the neighborhoods I'm interested in?
You want to work with an agent who really knows the area in which you are buying. A good agent will know if a home's list price is accurate, as well as the general price range for homes in the area.
3. Do you typically work in my price range?
A good agent should be comfortable working in a variety of price ranges. However, partnering with an agent who sells homes in the millions might not be the best idea if you are interested in homes around $250K. This is simply because the agent's connections and expertise will not be for the type of home you are hoping to secure.
4. How will you keep me informed?
The answer to this question is all about what you prefer.
You might be the kind of person that wants to talk on the phone with their agent every day. Or, you might be the kind of buyer that's fine with a text every once and while. This is one of the most important questions to ask when interviewing agents simply because matching communication styles is essential.
5. Have you ever owned property yourself?
For the same reason that many parents prefer a pediatrician that also has children, you will want to work with a Realtor who has been in your shoes. If an agent has never owned property of their own, you might want to second-guess working with them, or at least ensure they explain the reasoning behind their choice.
6. Can you tell me about your negotiation style and experience?
You want to get the best deal when you are buying a house.
Because of this, you want to make sure that your potential buyer's agent is a good negotiator. So, to make sure of this, ask about any additional courses they've taken in negotiation. You can also ask about examples of tough deals they've put through.
7. What is your approach to winning a bidding war?
Let's say you find the perfect house, but a few others buyers think it's perfect as well. It's a good idea to suss out how a potential Realtor might react to this situation before you commit to working with them. And no, the only way to win isn't heaps of money. Sometimes it's attitude and connections.
8. Can I talk to some of your past clients?
You can usually find out what a Realtor's former clients think about them from their online presence. However, how your potential agent answers this question can tell you a lot about them. Even if you don't end up calling their references, pay attention to how they speak about former clients.
9. What kinds of partnerships do you have with home service professionals?
You'll probably need to have the contacts of a good real estate lawyer, a good home inspector, a good appraiser, and more. When picking a buyer's agent, it can significantly decrease the amount of stress you are under if they already have connections in the industry and you do not have to seek these people out yourself. (However, if they have an "agreement" with these people wherein they are paid to recommend them, steer clear: That's illegal!)
10. Why should I pick you?
Let them sell themselves! Most agents will have a pitch. Take note of what they deem important to highlight during their answer and see if it lines up with your own goals.
Can you buy a home without an agent?
Technically, yes you can.
However, as mentioned, using an agent as a home buyer doesn't actually cost you anything. Because of this, you do not have anything to lose and everything to gain. This is because an agent knows the intricacies of property transfer and will fight for you to get the best deal.
If you're working with an agent you do not like and would like to work with a new one, don't worry! It is possible to fire a real estate buyer's agent. All you have to do is look at the agreement you signed with them.
Sometimes, you will agree to work with a certain agent for a set amount of time. So, as you move forward, just be sure to be polite and abide by the rules of your contract.
Are you ready to find the best buyer's agent? The team at Clever is here for you! Let us find you the house of your dreams at the perfect price.