Some buyers and sellers are not aware that the services of a real estate brokerage, specifically a buyer's agent, are paid for by the seller in most residential sales transactions. In standard residential sales transactions, the seller pays the commission for both their listing agent and the buyer’s agent. This arrangement is a part of the listing agreement. As such, buyers can hire an agent to advocate on their behalf for FREE. If the buyer does not find a home for some reason, the buyer’s agent will not be paid anything.
There is absolutely no reason why buyers should avoid hiring a buyer’s agent, broker, or Realtor to advocate for them when buying a home.
The buyer's agent explained.
A buyer's agent is a real estate professional licensed to represent individuals in a real estate transaction. However, the distinction is that a buyer’s agent will represent the buyer’s best interests instead of the seller. To ensure that your interests are protected in a transaction, your best bet is to sign an exclusive buyer agency agreement with a trustworthy buyer’s agent who is experienced in your local market. So, what exactly does a buyer’s agent do for a buyer?
Below we will discuss the top 10 reasons buyers should hire a real estate agent to help them find a home.
1. Educate Buyers
Most buyer's agents are deeply knowledgeable about real estate transactions, including the process of getting approved for financing and the real estate market. This is especially important if you are a first-time homebuyer or are looking to finance the property through an FHA loan.
In general, a buyer’s agent will ensure that you are prepared for the process and will probably insist that you get preapproved for a mortgage before starting your home search. By obtaining preapproval before you start looking for a home, you can guarantee that you will be taken seriously in a competitive market. A buyer’s agent can explain the differences between being preapproved or being prequalified if you don’t already know. Lastly, a buyer’s agent can also help you find a mortgage lender referral based on past clients’ experiences.
2. Search and weed out listings on your behalf
While you may have perused listings online and have a good idea of the type of home you’re looking for, a buyer’s agent can take your search even further. Specifically, because most buyer’s agents have their professional network and access to the Multiple Listing Service (MLS), so they can find listings faster than you can. Additionally, based on their buyer’s consultation with you, they will have a good idea of your requirements. Also, keep in mind that your agent may have already viewed a home that you are considering, especially if they work exclusively in your market.
Therefore, agents can weed out listings that will not meet your standards and save you a lot of time and energy throughout the process.
3. Scheduled showings
Navigating competitive housing markets and scheduling showing can be challenging if you try to do it yourself. Having a buyer’s agent to do this for you will save you a lot of time and energy. The buyer’s agent can schedule showings with the listing agent and pick times appropriate for you. Your buyer’s agent can also find open houses that you may want to attend together.
4. Answers your questions
An experienced buyer’s agent will understand that you may have a lot of questions about the deal. This is especially true if you are a first-time homebuyer. To facilitate this process, a buyer’s agent will typically attend all showings and open houses with the buyer if possible. A buyer’s agent will also know the right questions to ask a listing agent or a for sale by owner seller that you would not even think to ask.
5. Negotiations
After you find a home you’re interested in, it’s time to make an offer. An experienced buyer’s agent will guide you on making the right offer that is not too low that it insults the seller or an offer that is not too high given the home’s location, size, and condition, and comparable sales. Overall, an experienced agent can advise you if the purchase price is fair.
Additionally, a buyer’s agent will ensure that your offer and the sales contract include the appropriate contingencies to protect you from losing your money should something go wrong.
6. Attend the Home inspection
Since an experienced agent has attended their fair share of home inspections, they can serve as a second set of eyes during your home inspection. Notably, sometimes a home inspector may miss problems for several reasons. Therefore, if your agent is present at the inspection, this is the second layer of protection to ensure that major problems are not overlooked. Additionally, your agent will guide you and advise you on what problems are worth negotiating with the seller or what problems are not issues at all. Your agent can also advise if you should back out of the deal according to your home inspection contingency.
7. Act as a middleman between the seller’s agent and your real estate attorney
In residential sales transactions, things are constantly changing. It is important to have an experienced buyer’s agent who knows how to communicate with all sides of the deal. It is also good to have a buyer’s agent who will keep each party accountable throughout the process. For example, if the attorney is responsible for sending over a modification of the sales contract, your buyer’s agent can ensure that they do that. Overall having a buyer’s agent with excellent communication skills is one of the main reasons buyers hire agents to represent them.
8. Negotiate a price reduction after receiving the home inspection report
After receiving the home inspection report, if there are several deficiencies found within the home, an experienced buyer’s agent can negotiate on your behalf for a price reduction or other concessions based on the inspection report.
9. Offer Support
Most real estate agents understand that the underwriting process for home loans can be frustrating and confusing. Therefore, the best buyer’s agents will offer their support throughout the process and even help you review the paperwork. Notably, agents can keep track of your loan commitment and guide you through the process to avoid compromising your loan approval or your escrow deposit.
10. Get you to the closing table
If anything is outstanding, your agent will ensure that it’s completed before your closing date. Additionally, your real estate agent will typically schedule a final walkthrough of the property with you to verify the property’s condition before you receive the keys at the closing.
Final thoughts
Buyers should not look into buying a home without the assistance of a buyer agent. You must remember that listing agents do not work for you. Instead, they work for the seller. As such, if you want to ensure that someone is looking out for your best interest throughout the home-buying process, you must hire a real estate agent to represent you.