How to Hire a Buyer’s Real Estate Agent
Even for seasoned purchasers, the process of purchasing a property can be challenging and difficult to understand at times. According to the Zillow Group Consumer Housing Trends Report 2021, almost eight out of ten purchasers work with a professional real estate agent at some point during the process of purchasing a home. This is because of the benefits that come with working with an agent. Find out how to work with a buyer’s agent, as well as the benefits of doing so.
What exactly does it mean to work with a buyer’s agent?
A licensed and experienced real estate agent who works on behalf of a buyer to purchase a home is known as a buyer’s agent. They act as the buyer’s official representative throughout the entirety of the home-buying process.
The majority of real estate brokers work in a capacity that requires them to represent both buyers and sellers. However, there are real estate agents and brokers who only work with purchasers. This could be due to the fact that they have a preference for working exclusively with buyers, or it could be because their firm does not accept listings.
What sets a real estate agent who works with buyers apart from one who works with sellers in the real estate industry?
In a real estate transaction, the party looking to purchase a home is represented by a buyer’s agent, while the party looking to sell their property is represented by a listing agent. Both buyer’s agents and listing agents are licensed professionals who have a responsibility, both legally and ethically, to represent their clients in the best way possible.
Is it possible for a single real estate agent to represent both the buyer and the seller in a transaction?
The term “dual agency” refers to a situation in which one real estate agent represents both the buyer and the seller in the same transaction. In several states, having more than one agent is against the law. And even in states where dual agency is legal, many agents are of the opinion that it is impossible to adequately represent the interests of both parties and look down on the practice as a result. When looking to hire a real estate agent, it is in your best interest to go with an agent who will focus entirely on serving your needs.
Why should a buyer consider hiring a buyer’s real estate agent?
Buyer’s agents provide assistance throughout the entirety of the home-buying process, beginning with the first search and continuing through closing. The following are the primary advantages of working with a buyer’s agent:
Direct access to listings at any time: A buyer’s agent has a solid understanding of the available properties in your region and may have access to more listings than you can view on your own while searching online. The moment a new listing appears available on the market, agents will have access to it.
Skillful negotiations: Before you make an offer on a home, your real estate agent will assist you in determining a fair market value for the home and provide their expert feedback on a strategic offer that is based on the current market conditions. After that, they will act as your representative and negotiate with the seller’s agent to help you reach an agreement on the price as well as the terms.
Experience: Having an experienced agent on your side may be extremely beneficial throughout the entirety of the transaction, from knowing when to anticipate a counteroffer to seeing red flags in an inspection report. They are a reliable consultant who can provide you with straightforward advice that, if followed, may end up saving you time, money, and stress.
Recommendations: A competent real estate agent will be able to provide recommendations for reputable lenders, real estate attorneys, escrow officers, and home inspectors. Your real estate agent and the other experts involved in the transaction can often work together to streamline processes and keep the deal going forward if they have a good working relationship with one another.
Paperwork management: There is a lot of paperwork involved in purchasing a home, from the paperwork for the offer to the paperwork for the contingencies and the closing documents. Your agent will collect the necessary documents, inform you of your responsibilities and rights in accordance with the terms of the contract, check to make sure nothing is missing, and guide you through everything that has to be signed.
How much does it cost to hire a real estate agent to represent a buyer?
According to what real estate agents have reported, the total commissions received from a transaction amount to 6% of the home’s purchase price on average. This amount is then divided between the buyer’s agent and the seller’s agent.
When homeowners decide to list their property with a real estate agent, the first step is to negotiate and settle on a commission rate. According to the provisions of the listing agreement, the buyer’s agent is entitled to a share of the total commission that is paid out. In the vast majority of real estate transactions, it is the obligation of the seller to pay the commission due to the buyer’s agent out of the proceeds from the sale of the home.
This is just one illustration: On the sale of a home for $245,000, the seller’s agent would earn a commission of $14,700, or 6%, and then pay half of that commission to the buyer’s agent, which would be $7,350, or 3%, at no additional cost to the buyer.
It is possible that you, as the buyer, will be responsible for paying the commission that your agent is owed in the event that the seller is unwilling to pay the amount that was stipulated in the buyers agency agreement. For example, a seller using the for-sale-by-owner (FSBO) model may decide against offering any kind of commission. You may also be bound by a contract that requires you to make a payment that is greater than the amount of compensation that is being offered by the seller. Be sure to verify the agreement you have with the buyer’s agency to determine what kind of fees you would be accountable for paying in a scenario like this one. In certain situations, whether as a result of talks or the dynamics of the market, purchasers may end up paying the fee that their agent earns as a strategy to strengthen their offer.
A guide to locating and working with a buyer’s agent
You want to make sure that the real estate agent you select is a good match for your requirements, the way you prefer to communicate, and the objectives you wish to accomplish. If you want to discover a fantastic agent, follow these steps.
1. Carry out a search inside the agent directory.
Your search can be easily started on Zillow’s agent directory, where you will see a list of agents who serve your area. This is an easy place to get started. The application also includes biographies, reviews, ratings, and a history of the transactions they’ve helped facilitate in the past. It is a fantastic method for getting a general sense of an agent’s reputation.
2. Ask friends and family
Your social network is another fantastic place to look for a trustworthy agent to represent you. Ask for a referral from friends, family members, or coworkers who have recently purchased a home if they have done so in the past few years. You may always compare the names of those agents with online reviews to gain a more complete picture of an agent’s level of experience.
3. Speak with a minimum of three different brokers.
Have a discussion with a minimum of three different buyer’s agents so that you may gain a better understanding of what it would be like to collaborate. Here are some crucial questions to ask:
• During the previous three years, how many purchasers in this area have you acted as a representative for?
• Do you work in real estate on a full-time basis?
• How soon do you respond to client requests? When do you begin and end your workday?
• Do you hold any credentials as a buyer’s agent, such as the Accredited Buyer Representative (ABR) or the Certified Buyer Representative (CBR) designation?
4. Sign an agreement
When you have found the correct agent, they will most likely want you to sign a contract that describes the ways in which you will work together and the ways in which they will be compensated for their services. There are typically two varieties of agreements between buyers and buyers’ agents:
Agreement between an Exclusive Buyer’s Agent and the Buyer: By entering into this kind of contract, you are committing to working exclusively with that agent for a predetermined amount of time, which is typically between six and twelve months. In most cases, you will be required to pay a commission to the agent for any property that you acquire during that time period. If the seller of the home you buy does not offer a commission, which is more typical with FSBO sales (for sale by owner), you may be liable for paying the commission that your agent earns, so make sure to read your contract very carefully.
Agreement between a non-exclusive buyer’s agent and the buyer: This agreement is a little bit more lenient, and it stipulates that you will be working with your agent; but, you are free to also work with another agency so long as you inform the first agent of your decision. The real estate agent who ultimately shows you the home that you decide to buy is the one who is eligible for the commission.
Considerations to make when selecting a buyer’s agent
It’s possible that you’ll be spending a significant amount of time with your real estate agent throughout the course of the home-buying process. Because of this, it’s important to find someone whose communication style and work ethic are compatible with yours. In addition to finding someone with whom you have a compatible personality, it is important to look for a real estate agent who possesses the following crucial characteristics.
Expertise on a hyperlocal scale
The real estate market in each location is unique. Prices of homes, the level of demand for housing, and the sorts of homes available can all differ from state to city to even neighborhood. Look for a real estate agent who has a lot of expertise selling homes in the neighborhood where you want to buy property. You can research their previous sales on Zillow and map the addresses, or you can just ask how much business they’ve done in the area in the recent past.
Competence in speech and listening
Your real estate agent should be able to communicate effectively not only with you but also with the various other crucial parties involved in the transaction. They should be able to effectively explain your offer to the seller’s agent and negotiate any contingencies that may be attached to the transaction. In addition to this, they should be skilled at working with your mortgage lender, home inspector, and attorney or escrow officer. Ask them how quickly they respond to customer questions or requests, and find out when they consider themselves to be “off the clock.” In order to assist you in keeping the purchasing process going ahead, the majority of reputable real estate brokers are available after hours and on weekends.
Years in the industry, and a reputation for excellence
People don’t realize how much labor is involved in becoming a real estate agent, which is one reason why this is such a popular career choice while having one of the worst failure rates. A real estate agent who has been working in the field for at least three years typically has a solid understanding of the procedure and a number of successful transactions under their belts. If you decide to work with a less seasoned agent, you should confirm that they have successfully closed previous transactions and that they are being mentored by an agent with more expertise.
