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Are you hoping to purchase a home soon? There’s a lot to think about, especially in today’s shifting market, and finding the perfect house can be like finding a needle in a haystack. Luckily, you don’t have to navigate the process on your own. A local real estate agent who specializes in helping buyers find the right home, often referred to as a buyer’s agent, can be a crucial help for any house-hunter.
What is a buyer’s agent?
Typically, real estate transactions involve two different agents: one who represents the seller and one who represents the buyer. The role of a buyer’s agent is to act as the homebuyer’s guide on their real estate journey. Their primary responsibility is to help house-hunters find the home that best suits their needs and budget, ticking as many boxes as possible on their wish list.
A buyer’s agent performs several other duties as well, including handling necessary paperwork, drafting and submitting offers on the buyer’s behalf, assisting with negotiations and coordinating the closing process. If there are any hiccups along the way, the agent can also play an instrumental role in preventing the deal from falling apart.
If you see the initials ABR after a Realtor’s name, that stands for Accredited Buyer’s Representative — a special certification designated by the National Association of Realtors (NAR). You don’t necessarily need an agent with the ABR designation to buy a house, but those who have it have received special training in being an advocate for homebuyers.
Buyer’s agent vs. listing agent
While a buyer’s agent represents the buyer, listing agents work on the other side of the real estate transaction. They represent the seller and are responsible for listing the property for sale (hence the name) and positioning it to attract top dollar. Listing agents also host open houses, help sellers sift through offers received from prospective buyers and negotiate on the seller’s behalf.
Somewhat confusingly, the seller’s agent or listing agent is not the same thing as what’s often called a selling agent. In fact, quite the opposite: Once a property goes into contract, the buyer’s agent may now be referred to as the “selling agent.” Regardless of terminology, though, your agent is still yours, and still working on your behalf.
Do I need a buyer’s agent to buy a house?
You are not legally required to hire a real estate agent in order to buy a house. You always have the option to find a home and negotiate the terms of the purchase on your own. However, it’s not the preferred method for most homebuyers. According to NAR data, an overwhelming 86 percent of buyers chose to hire a real estate agent to assist with the homebuying process in 2022.
It’s in your best interest to do so for several reasons. For starters, a real estate agent with extensive knowledge about your local area can give you a competitive advantage in finding and bidding on homes. This is especially true in areas where inventory is extremely limited, as is the case in many markets around the country.
Having an expert on your side also provides assistance with the purchase agreement. Clauses, disclosures and contingencies can be confusing, and you’ll want someone who understands them to make sure they work in your favor. An agent can also help you negotiate potential seller concessions if the inspection reveals issues with the home. Most importantly, you’ll receive professional advice and answers to any questions you may have.
How much does a buyer’s agent cost?
Real estate commissions typically total between 5 and 6 percent of a home’s sale price, split evenly between both agents in the transaction. However, these are paid for by the seller — the seller pays your agent’s commission as well as their own. A home’s sale price often accounts for this expense, but you as the buyer will not have to pay your agent’s commission directly.
How to find a buyer’s agent
There are a lot of real estate agents out there — more than 1.6 million, according to NAR. How to find the right agent for you? Asking around for recommendations is a great place to start. “Speak to friends, ask local business owners and look out for signs on the street,” says Dennis Shirshikov, head of content at real estate site Awning. If you see “sold” signs in your desired neighborhoods, reach out to the agents who brokered those sales. You can also search online for agents who’ve successfully closed transactions where you’re looking to buy.
Once you have a list of names, narrow it down by doing some online research. Then pick three or four to interview, asking plenty of questions to determine how each one works and how they would help you find what you’re looking for. You want someone you click with and can work well with. “Look for responsiveness and communication skills,” Shirshikov says. “If communication skills are poor, and you keep missing each other on calls and emails, you’re unlikely to buy a property [together].”
It’s also important to ensure they can handle any potential issues that may arise. “Ask the agents you are interviewing to discuss some difficult situations they faced with past clients,” Shirshikov says. “If the agent responds in a positive way and puts the client first in disputes, that’s an agent to stick with. If they have never encountered tough situations or have handled them poorly, look for someone else.”
Signing a contract
When you decide on a buyer’s agent to work with, they will most likely ask you to sign a contract, or exclusivity agreement, acknowledging that they are representing you for a stipulated amount of time. This is normal, so don’t be put off by it. But before signing on the dotted line to make the partnership official, review the entire contract. Ask them to address anything that’s unclear to ensure you are both on the same page. Finding a home could take some time, but the contract term typically won’t exceed six months. Once that timeframe expires, if you still haven’t found a home, you’ll be free to explore other agents.
Buyer’s agents play an essential role in the homebuying process, especially for a novice or first-time buyer. An experienced local agent can help make finding a home, submitting offers, negotiating favorable terms and getting to the closing table a smoother experience.