Do I need a buyer's agent? In a word, yes.
What is a buyer's agent?
The buyer's agent works exclusively to find buyers a home that suits their needs and requirements and to protect the buyer's interests. Some services they provide include
- using their knowledge of the area and your criteria to find the properties that suit you best;
- sharing current information about the market you're shopping in and the homes you're considering;
- providing advice during purchase negotiations;
- connecting you with other professionals (inspectors, movers, attorneys, mortgage brokers);
- overseeing the home inspection and helping you evaluate the findings;
- negotiating contingencies; and
- offering guidance through each step of the closing.
And that's different from a listing agent?
It is indeed. The listing agent represents the sellers. Their responsibilities include
- protecting the seller's interests;
- pricing the home;
- marketing the home;
- vetting buyers (confirming financing, e.g.);
- negotiating with buyers; and
- ensuring the terms of sale are favorable to their clients.
What is a dual agent?
In some states, real estate agents can contract with both the buyer and the seller in a transaction – but savvy buyers today are less likely to allow an agent whose primary client is the seller to advise them.
In states where it's legal, an agent might offer to represent both sides, perhaps agreeing to reduce the percentage of their commission – taking a little less in order to avoid giving up half their commission should another agent become involved – but closing the deal "at any cost" can cost you significantly.
Can one agent fully protect the interests of both parties? As a buyer, could you accept the agent's recommendations knowing they're equally obligated to advance the seller's needs?
Bringing your own agent to the table allows a clear division and diminishes the opportunity for conflicts of interest. Even impartial experts (see the How to Find a Good Buyer's Real Estate Agent link, below) strongly recommend avoiding dual-agent scenarios.
Who pays the buyer's agent?
The creaky myth that sellers pay the agent commissions continues to be perpetuated today. Like many elements of a real estate transaction, though, it's complicated. Let's try to simplify it.
A buyer's agent is paid commission at closing, just as a listing agent is. Because agent commissions are taken "from the seller's side" of the balance sheet, many buyers are told that working with an agent doesn't cost anything. It may look that way on paper, as it's money that the seller agrees to relinquish. But the cost of commissions is, naturally, factored into the listing price. Since the only person bringing money to the table at a closing is the buyer, you are, in fact, paying them.
Here's something to consider, though: Unless the property is for sale by owner, the sellers will have a contract with listing agent, and they will have agreed to a commission percentage – usually 5% to 6% of the purchase price. So, whether you work with a buyer's agent or not, you're supplying this money at closing. If you contract a buyer's agent, the agents split the commission.
The bottom line is, having a buyer's agent won't cost you extra.
How do I find a buyer's agent?
If you were shopping around for a real estate agent to sell your home, you'd solicit referrals from your network, maybe use our matching service, interview a few candidates, and choose the agent who you feel will work hardest for you. Finding a buyer's agent is the same. (And, same as if you were selling, if you close your purchase with an agent you found at Dwellful, you will get cash back at closing.)
The letters ABR in a real estate agent's title means that agent has completed extra training to achieve Accredited Buyer's Representative status; according to the National Association of Realtors® the purpose is to "provide the quality of service and degree of fidelity to buyers that sellers have customarily enjoyed." It's reassuring to see this designation, but not mandatory – there are plenty of outstanding buyer's agents without it!
Your primary concern as a buyer is to find an agent who will commit to representing your interests; who knows the area, the market, the people, and the business inside and out; and whose only goal is to see you nail an excellent deal on the house you've been dreaming of.