You’ve researched mortgages, contacted a lender to get preapproved and saved up enough money for a down payment. You’re finally ready to start searching for your perfect first home. But first, you need to find a real estate agent to assist with the search and navigate the buying process.
Where do you start? Is there a right time to seek help? Are there specific questions you should ask to decide if an agent is a good fit? These are all valid questions for any first-time homebuyer, and understanding how the process works can help you prevent costly mistakes when buying your first home. Read on for everything you need to know.
Before starting your home search, it’s important to understand some basic terminology. For starters, the difference between a real estate agent and a Realtor. A Realtor — capitalized because the term is trademarked — is simply a real estate agent who is also a member of the National Association of Realtors. Regardless of which term is used, both agents and Realtors are licensed real estate professionals who are trained and qualified to help people buy and sell homes.
Both can also serve as either a listing agent, who represents the seller and the listing that’s being offered for sale, or a buyer’s agent, who represents the homebuyer in real estate transactions. Your buyer’s agent will help you navigate local listings, finding the ones that best suit your needs and getting you in to see them. If you want to make an offer, they coordinate that as well — along with all the negotiations and paperwork that go with it.
Who pays real estate commissions?
Some homebuyers are tempted to forgo hiring an agent to keep costs down. However, it’s the seller who generally pays real estate commissions — for both their own agent and the buyer’s agent.
The typical fee is 6 percent of the home’s sale price, split evenly between both agents. So, if you purchase a home for $400,000, both your agent and the seller’s agent would receive $12,000, or 3 percent each. The cost comes out of the seller’s proceeds.
When should I contact a Realtor?
The ideal time to reach out to an agent depends on your familiarity with the real estate process. “For first-time homebuyers, the best time to contact a Realtor would be after obtaining a preapproval letter,” says Jana Edmond-Hill, an agent with LPT Realty in Tampa Bay, Florida. “However, if a potential buyer doesn’t know where to start, it doesn’t hurt to contact prior to that. A Realtor can also help navigate the preapproval process.”
A preapproval letter — in which a mortgage lender gives you a preliminary “yes” for your financing — provides reassurance to both agents and sellers that you’re a serious buyer who can secure the financing needed to close the deal. Plus, it gives you a solid idea of just how much you are able to borrow, and thus a precise budget to follow.
Getting preapproved means you know your maximum loan amount, so your agent is better equipped to help you find a home you can afford. It also helps you avoid the disappointment of finding a home you love, only to be denied financing.
First-time homebuyer programs
It’s definitely worthwhile to research first-time homebuyer programs in your area. These can help increase your buying power with low-down-payment or government-backed mortgage programs, if you’re eligible. There are also many programs available at the state and local level, along with down payment assistance grants, loans and savings-match options for homebuyers who meet the eligibility criteria. You might also explore nonprofit and employer-assisted housing programs designed to make homeownership more accessible. Your agent can advise you on what options are available in your specific market.
Questions to ask a Realtor when buying a home
Don’t just go with the first real estate agent you find — interview several candidates before you decide on one. It may help to ask friends and family who are already homeowners for referrals. You want someone you click with, who understands your specific needs. Whether you meet by phone, Zoom or in person, ask plenty of questions to determine if they’re a good fit for you. Here are few key ones:
- How much experience do you have? Find an agent who is well-versed in the specific location you’re looking to purchase in and understands its local trends.
- Do you work as a full-time agent? Some only work in the industry part-time, which may not be an issue. But they may not be as available as a full-time agent would be to address concerns or questions. “This is one of the most important questions to ask a Realtor prior to hiring them,” says Edmond-Hill. “You want to determine how much time they can dedicate to helping you find a home.”
- How often will you provide updates? Your agent should work hard on your behalf and keep you in the loop as frequently as possible.
- Are you working as a dual agent? In many states, dual agency — in which a single agent represents both the buyer and the seller — is perfectly legal. This is not necessarily a bad thing, but you want your agent to have your best interests in mind. ”It could create a conflict of interest,” says Edmond-Hill.
How to reach out
There’s no right or wrong way to initiate contact with an agent: You can reach out through phone, email or text, and you can use an online template if that makes it easier. Many real estate websites have direct email capability built in, so all you have to do is click the “contact” button.
“Social media is big right now, so I’ll often ask potential clients to reach out to me via Facebook or Instagram,” Edmond-Hill says. “But any option that works for the client is fine — I have my phone with me at all times.”
Ultimately, you want an agent who is willing to use your preferred method of communication. If you communicate almost exclusively via text and your agent constantly asks if you’re available to speak on the phone, you probably won’t work well together.
Take the first step
The homebuying process is complex, and it can be overwhelming for a first-timer. Instead of navigating it all on your own, take the time to look for a real estate professional who can guide you through your journey. Having a buyer’s agent by your side means you also have all of their professional expertise at your disposal.