Using a Buyer's Agent
My husband and I are planning to buy a condo. Does it make sense to get a buyer's agent? Does anyone have any experience with a buyer's agent? How much do they charge?
We used a buyer's agent when we bought our house five years ago, and I highly recommend it! The advantage of buyer's agents is that they don't list houses for sale, and therefore they won't be pushing you to buy one of their listings. Agents who represent both the buyer and the seller in a transaction have an inherent conflict of interest. For example, they can't help the buyer with insider information about the seller (such as the lowest price they will accept).
Our agent helped us get pre-approved for a mortgage, he came with us to look at houses and made sure our offer got to the sellers right away when we found our house. He also helped to set up an inspection, which I also recommend. It's worth the money! Even though there was nothing seriously wrong, we learned important things about our house that we never would have been aware of otherwise, especially as first-time buyers.
As for our buyer's agent's compensation, he received half the commission that the seller's agent earned (this is standard practice for all types of real estate agents), so it didn't cost us anything to use his services. The only thing we paid for was the inspection. Just make sure that you read your contract carefully before signing, as different buyer's agents may have different policies.
Find a Real Estate Attorney
The agent would still be working for the seller since the agent gets paid according to the sale price. It doesn't make sense to get a buyer's agent. Get a good real estate attorney.
Handy when Bargaining
A buyer's agent represents you not the seller, and they usually take half of the commission just like the seller's agent. I used a buyer's agent and found that she helped more in bargaining with the price because all agents you contact will represent the seller. That's the nature of the game. She screened places for me so I didn't have to waste time looking at something which would not suit my needs. Be sure when signing the contract that it clearly states that you are hiring a buyer's agent.
Saved Us Valuable Time
YES, YES, YES! Getting a buyer's agent was the best thing we did when we bought our first home. There was no charge to us (expenses came out of the seller's closing costs), and our agent knew the area we were looking for far better than we did. She was able to give us "inside" tips about the neighborhood, resale values, flood zones, and more. Even better, once we gave her the profile of what we were looking for, she chose properties for us to view, which saved us valuable time. But the best thing about getting a buyer's agent is that you'll have someone to help you navigate the negotiation and contract process (and perhaps even the loan application process). Truly, all we had to do was show up at the closing with our favorite pen in hand. In addition to getting a buyer's agent, I would also recommend checking your library for the book 100 Questions Every First-Time Home Buyer Should Ask by Ilyce R. Glink (Random House, c.2000). It was our bible for navigating the home buying process.
Be your own agent and use a real estate attorney.
Suze in Michigan
It's the Only Way to Go!
I highly recommend getting a Buyer's Agent! My husband and I used a Buyer's Agent to buy one of our houses. It was one of the best home-buying experiences that we've encountered. The agent pointed out faults with each of the houses, as well as perks, because he didn't have any vested interest in our buying that particular home. When you deal with a regular agent, even if they are "representing the buyer," they are often truly obligated to the seller because they are affiliated with a real estate company that is obligated to the seller. You avoid this with a Buyer's Agent. I believe that a Buyer's Agent is the only true way to have someone represent your interests as the buyer. As far as cost, our agent got 3% of the sales price, which was paid at closing by the seller. So, his service was no more expensive than that of any other agent. We signed a contract with the agent when we first met with him that disclosed his fees.
It Worked for Us!
My husband and I used a buyer's agent to purchase our current home and were enormously pleased with the process. We did an Internet search under "buyer's agent" and found a national "chain" who recommended someone in our area. He turned out to be the best real estate agent we've ever worked with, and it was wonderful to feel we had someone looking out for our best interests. Using a buyer's agent didn't cost us a penny, nor did it cost the seller more, just the regular commission he had to pay anyway.
We are now in the process of selling this house and are very aware that our selling agent works for us, not the buyer. While there are many honest real estate agents, be very careful about trusting any agent who is not legally bound to look out for your best interests.
Take the Next Step
- Make sure you're not overpaying on your mortgage. If you haven't looked for a lower mortgage rate in the past year, use our simple tool that compares different lenders to see what your monthly mortgage payment could be. It's private, only takes a minute and could show you how to save thousands!
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save and I could use help dealing with it! or No, debt is not a problem but I am trying to get ahead financially!
More Money Tips & Tools
- 5 low-risk ways to earn higher interest now
- 10 easy ways to save money for the holidays
- 7 IRA withdrawals that don't trigger a penalty
- 4 secrets to maximize your credit card rewards
- Don't toss your financial resolutions just yet!
- How and why to put your legal and financial affairs on autopilot
- 18 ways money slips through your fingers
- This week's Readers' Tips