Common questions about finding and hiring a Buyer's Agent

 

When should I start to look for an agent to help me?

Unfortunately, most people start their property search looking for homes, thinking that this is the most important part of their search.  SadIy, this is really the second thing that they need to do.  First, they actaully need to find a Realtor.  No, really: the minute you would consider calling a random agent to show you that cute house you saw online, you need to put that phone down and start thinking about which Realtor you'd like to represent you.  Because it doesn't matter how much you love a home if you don't have someone you've met and trust to represent you in that real estate deal.  And yes, you're probably not going to actually buy that first home you see, but you do need to be consciously thinking about who you want to help you in that search and working just as hard at finding a great Realtor as you are searching for homes by yourself.  The Realtor you eventually choose can show you any home - and will be willing and open to do so - once you've made an exclusive commitment to work with him/her.  That's not to say that you need to link up with the first Realtor you meet, but you do need to actively choose someone, instead of just defaulting to whomever you met first. 

So how do I find the right agent?

Interview them and the pick the one you like and trust the most. Ask your friends, parents, or co-workers who they've liked... and then interview those agents - don't just go on someone else's opinion. Make sure that your Realtor is someone who gives you the information you need, when you want it.  This person is about to help guide you through one of the biggest financial purchases you will make that will undoubtedly create stress and excitement in your life for at least a month: so make sure you have chosen someone who is knowledgable, trustworthy, interesting, savvy, and fun.  Don't just wind up with someone because they've helped you a few times: make an active choice. Who you choose to represent you and your money is critical to how well your transaction goes.

NOTE: If you call off of the listing sign of a home you like, you will probably be talking to the Listing Agent of that home , meaning the agent who represents the Seller. Unless you are OK with Dual Agency (see Who Represents Whom), then hire your own agent (who you've interviewed and only represents you) to take you to see that home.

What is the Buyer’s Agency Agreement?

Once you find a Realtor with whom you are comfortable, you sign a Buyer’s Agency Agreement, agreeing to “hire” your Realtor’s firm and a particular agent as your personal representative who, by law, must represent your best interests to the best of his/her ability for a specified period of time. That agent then represents only you, the Buyer, in any real estate transaction during that time period, unless you authorize otherwise.  

Who Really Pays For the Buyer's Agent Services?

  • The Sellers’ Listing Agent is almost always responsible for using her own commission to pay your Buyer’s agent’s fee You, the Buyer, seldom if ever pay for these Buyer services directly.

  • When Sellers hire a real estate firm, they agree to pay a commission to their agent (the Listing Agent) to help get their home sold; this is usually some percentage of the sales price. That Listing Agent then decides what portion of their commission goes to compensating a Buyer’s Agent’s Firm.

  • The Buyer’s Agent’s Firm takes a portion of that commission at closing and gives the remainder to the Buyer’s Agent who then pays taxes, mileage expense, desk fees, office space rental, advertising, and other business expenses related to finding people homes. The portion that is left after these commission splits is the final commission to the Buyer’s Agent.

  • The pie chart to the right shows the Listing Agent's Firm's commission and how that is divided up.

Isn’t it cheaper to not have a Buyer’s agent?

First, you are rarely, if ever, responsible for paying the fees for your buyer’s agent to begin with: the seller’s listing agent pays these from her own commission. Second, you can’t expect to make a lower offer just because you choose not to have an agent. You are just requesting to do all the work of an agent by yourself, which has nothing to do with the listing agent's total commission. When you are unrepresented, the listing agent just gets to keep what would have been the buyer’s commission for herself. What the buyer’s agent would have been paid doesn’t affect the final price because the is commission set between the sellers and their listing agent before the property even goes on the market. Buyers without agents typically pay more for homes because they don’t have the facts and market data to support lower offers and the repair negotiations.

How soon should I sign Agency?

As soon as possible.  Bouncing from agent to agent wastes both your time and theirs.  The best way to make your home search easier is to interview agents up front, find someone you like, sign agency, and then work closely together to find your next house.  By channeling all of your information and energy into one agent, you increase your likelihood of finding your home sooner and having better rapport and representation.  Think of it like dating.  It's OK to meet people and date around at first; but you don't want to share your personal information and settle down with someone you are not serious about because it increases your chances of being hurt.

How do you best “use” your agent?

Enlisting the services of a professional Buyer’s Agent is similar to hiring an accountant to help you with your taxes, a doctor to help you with your health care, or a mechanic to help you with your car. You need to trust your agent and give her/him any information you think could affect the eventual purchase. The more information you provide about your needs and wants, the faster and easier we can help you find the home you’ve been looking for. You should also trust your agent’s suggestions and referrals as he/she has a fiduciary responsibility to get you the best service possible.  You hired this Agent because you like and trust her and she does real estate transactions for a living: so listen to her advice and directions. 

Can you "fire" your Agent?

Yes.  Most of the time this is not a problem, even though it may be uncomfortable.  If you feel you are not getting the service your were promised and/or you are not being represented well by your Agent, then you can terminate your Agency Agreement and "hire" a new Agent.  This becomes more complicated and convoluted if you've found your dream house and/or started the contract process, but it still can be done in most circumstances. 

Also keep in mind you can be "fired" by your Agent. (Some examples would be clients who are unethical, disrespectful, and/or wasteful of the Agent's time.)  When you are interviewing potential Agents, ask them about whether they have fired or been fired by clients.  Sometimes, it's not always a bad thing.