Who Pays Buyer’s Agent?

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Looking to buy a house? Who do you trust to help you find the best deal possible? A Realtor, right? We’re going to cover why working with a Buyer’s Agent is to your advantage, who pays and what you can expect.

What’s A Buyer’s Agent?

When searching for a new home, a Buyer’s Agent is the one who will represent you and whose only goal is to protect your best interests in any transaction. By far, it’s much better to work under a Buyer’s Agency Agreement because this will ensure that you know exactly what to expect from your Realtor and how he/she will represent you. It offers you written protection and guarantees that will come in handy during the buying process.

Establishing a mutually beneficial relationship at the start with your Realtor places you in a strong and confident position as you search for your new home and navigate the process from purchase offer to closing.

Benefits of Using A Buyer’s Agent

Would you go into court without an attorney? Would you try to negotiate a deal worth thousands and even hundreds of thousands of dollars without a professional at your side? Some would, but logic dictates that having a professional who knows all the ins and outs of a situation at your side, is unquestionably wise.

Assuming that you’re not entirely familiar with all of the details of negotiating a purchase and proceeding to closing, an agent will be able to make your experience go smoothly and help you avoid some very costly missteps.

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There’s so much that goes on once an offer has been accepted including but not limited to:

  • Scheduling and attending home inspections.
  • Negotiating concessions following a home inspection.
  • Filling in, securing signatures & distributing legal paperwork.
  • Writing addendums and securing needed signatures.
  • Addressing checks & balances.
  • Working as a conduit with seller’s representative, financing partners and title agencies.
  • Making sure all participants are communicating and moving forward to close.

Why Not Just Work With The Listing Agent?

If you were to search for your next home by yourself, you are likely missing out on other properties that are better suited to your needs. Without full access to the listing system used by Realtors, homebuyers won’t get the full picture of what’s actually out there.

Real estate agents will often notify other agents of upcoming listings before it even hits the market. This can be a huge advantage to you during a highly competitive market where buyers are many and listings are few.

You see, sites like Zillow, Trulia and Realtor.com are completely reliant on listing agents to keep their listings up to date. Far too many, don’t.

There are many reasons for this but suffice it to say that many listing agents will deliberately keep a listing as “Active” on these sites as a lead generation strategy.

Others may just be too busy to constantly update the information on each one of these sites. Almost 50% of the time a client asks me to check on a property they saw listed on these sites, I find that it’s no longer available.

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Taking the approach of searching on your own and contacting listing agents along the way often places you at a disadvantage right off the bat. Buyers unknowingly ask the listing agent representing the sellers to help them prepare an offer on the home. While this is possible, as a home buyer you are asking the agent whose first obligation is to the seller to now represent you as well.

There are some unnecessary risks in doing so. First, when in a multiple offer situation you will have to compete with the other buyers without having a buyer’s agent consult with you regarding strategies to get ahead of the other offers.

The listing agent has now moved into a Dual Agency and will have to treat both sides indifferently. That is, not favoring one side over the other which means that you have little power in the process.

What You Say Can & Will Be Used Against You

Be careful what you tell a listing agent as it could compromise you in the future negotiations. During the time that the listing agent is only representing the Seller, he/she works exclusively for the Seller’s best interest and will likely share your conversation with his/her client. In doing so, it could limit your chances of negotiation in the line.

For instance, if during your initial discussions with the listing agent you happen to say that the price is “definitely doable”, you can be sure that it will likely be mentioned to the seller even before you decide to make an offer. Should you make an offer that is lower than the listing price, the seller may not be willing to negotiate with you because you’ve already indicated the price was “doable”.

A buyer’s agent will make sure that your conversations are kept in confidence and the listing agent only hears what he/she needs to know.

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Buyers, Sellers or Both

Many agents choose to work primarily with either buyers or sellers. Independent Realtors (not part of a large team) like myself, work with both because I believe that having that experience makes me sharper and more valuable to my clients. I prefer to work independently because when it comes to my career choices and how I run my business, I prefer to be at the helm. I’m a decision maker, always have been.

The drawback with focusing only on one side of the transaction (either the buyer side or the seller side) is that although you may be very good at one, you will be much weaker at the other. You see this scenario plays out quite often when working with an agent who is part of a large real estate team.

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Working With Your Buyer’s Agent

During the time you are working with a buyer’s agent, you will be building a relationship and friendship with them that may last for many years to come. That is always my hope when I begin working with a new client.

A good buyer’s agent will show you many different types of properties until they get a handle on exactly what you want and don’t want in your next home. At that point, you’re agent will be able to narrow down to two or three at a time that closely fit your priorities.

Working exclusively with a buyer’s agent assures you that your working with someone who understands all of the complexities on the buying side of the equation and that your needs are met during the whole experience.

By the time you decide to submit a purchase offer, you will have developed trust between you and your buyer’s agent and can work with them knowing they have your 100% best interest as their priority. Knowing that your discussions are kept private and that nothing will be revealed to the seller without your express permission, is a big plus.

Best Of All…NO FEES

How many professionals are willing to put in lots of hours, days, weeks or even months with you every step of the way without an invoice? Surely, you must provide some compensation, right?

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Fortunately for you, 99% of the time buyers agents are compensated by the seller, not the buyers. Sure there are some rare instances where both sides have agreed to split the commissions. I see that sometimes happen when negotiating investment properties between investors.

This means that you don’t have to pay the buyer’s agent commissions out of pocket and you can rest easy knowing that you got the best service regardless. It’s also why it’s so critical that you assure your Realtor of some level of loyalty.

What If I Don’t Like The Agent?

Not everyone gets along. If after you’ve signed a buyer’s agency with a Realtor and spent some time working with them, you decide that they are not a good fit for you, you can simply request to terminate the agreement. No one can force you to work with them, it’s counterproductive to do so.

I’ve had several clients who were unhappy with agents in the past. That’s not uncommon. Thankfully, I’ve never had a client ask to break an agreement with me but if they did, I would certainly honor their request.

How Much Time Do You Have?

how much time do you have to search for a new home

Assuming you spend most of your waking hours at work, how much time do you really have to devote to searching for the right home, vetting each property and calling different agents to schedule showings? My guess would be not much and if you have a family, even less.

With a buyer’s agent on your side, you don’t have to worry about missing out on an opportunity. He/she will dedicate enough time to finding the right places that better fit your personal wants and needs.

Your agent will make sure to do legwork beforehand, reaching out to listing agents to obtain more information not available to the public online. Doing so helps save you lots of time looking at properties that won’t be a good fit.

Ever gone to an open house, only to be disappointed by the asking price or some other element of the property? A buyer’s agent will be able to vet the home before you even get there. A good buyer’s agent will know what’s important to you and steer you clear of properties that fall short of expectations.

Another advantage to working with a buyer’s agent is that you can get access to more homes. If you’re checking only a handful of sites or listings, you’ll likely miss out on properties for sale that may not be on your radar.

Since your agent is connected to the real estate industry, he/she will be able to hear houses that may not get listed publicly or at least not on the sites that you would be checking. They’d often be the first to know about new and upcoming price reductions as well.

Professional Recommendations & Discounts

If you’re new to the home buying process, you probably aren’t aware of all of the steps you have to take to make sure that you’re getting a good deal. You’ll also have to work with a variety of people from mortgage brokers, home inspectors, title agencies, home warranty agencies and moving companies.

Need a mortgage broker, appraiser or home inspector? Ask your Realtor! As a Realtor, I often get sent coupons from these professionals and pass them along to my clients. I also keep a list of good home inspectors used by other clients that I willingly share with each of my new clients. This saves them time and/or money. I know that if they choose anyone from that list, they are in good hands.

Exclusive Agency

Entering into an exclusive agency with a Realtor of your choice assures you of a mutually beneficial relationship. It guarantees your commitment to work exclusively with that agent and it assures you that your agent will place you and your interests at the top of their priority list.

Think about it. It can sometimes take weeks and months to find the right house at the right time and price. Why would any professional commit to spending that much time with you unless you were willing to ensure them of your commitment to working with them in return?

For the most part, these contracts stipulate that you and your agent are exclusive. This means that you agree to work with only your agent to find and submit offers on properties that are of interest to you.

This doesn’t mean that you cannot shop for homes online or walk through an open house without your agent, however, when it comes time to schedule a private showing or make an offer, you need to work solely with your agent.

Good, better and best

This level of commitment is going to help you find your dream home much faster than if you tried to do it on your own. When you have someone working full-time, you can see more houses and work with more sellers to find the right fit for you.

On top of that, buyer’s agents are all about building a relationship with you. This experience is more than just about making a commission, it’s about ensuring that you are satisfied with your new property.

Because the agent isn’t paid until you close the deal, he or she cannot be satisfied unless you are. That means your agent will pull out all the stops to make this process as simplified and streamlined as possible.

Questions To Ask A Buyer’s Agent?

By now, I hope to have convinced you of the big advantages having a buyer’s agent on your side offers you. However, how can you be sure that you’ve found the right one? Here are some questions to ask that will help:

  • What areas or neighborhoods do you specialize in?
  • What’s your availability?
  • How long have you worked as a Realtor?
  • Full-Tim Agent or Part-Time Hobby?

I’ve been full-time in real estate since 2011. It’s been my experience that a large percentage of agents out there have other full-time commitments. They obtain a license in the hopes of some part-time income that may come their way.

That’s not the case for everyone though. There are many others who are full-time agents and very good ones at that. So how can you tell? Get them talking about themselves and their background.

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Few agents will be willing to reveal that they are just part-timers if you ask them directly. However, there’s a lot of information that can be inadvertently revealed during a conversation. If they say they are enrolled in university full-time, you know you’re not going to be at the top of his/her totem pole.

Many people who work seasonal jobs, such as school teachers, work as Realtors over the summer months and are good at it. However, if your search takes you beyond that, you can expect that the lions share of that agent’s time is no longer working for you. Understandably, we only have so many hours in a day.

What’s Your Timeframe?

white picket fence

One thing to consider is your timeline. Do you have to move quickly due to a new job or expiring lease? If so, then you might want to find a buyer’s agent who can be on your case full-time. Otherwise, it could take longer to get into a new home and you won’t have the luxury of waiting for the perfect opportunity.

Something else to consider is scheduling. If you have very little time or a unique schedule that will make it difficult to see homes during normal hours, you may want to find an agent who can accommodate these needs.

Finally, remember that there are a lot of steps to getting into a hew home. Before you hire your buyer’s agent, ask them how they help their clients achieve their home buying goals. If the market is really hot ask them what they do to help their clients compete for the contract?

Questions & Comments Welcome

As always folks, you are invited to submit your questions or share your experiences here. I love to hear them and will always make an effort to respond to you in a timely manner. So go ahead, tell me what you’re thinking….

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6 Responses

  1. Sara says:

    Great article! When we were looking for our first house, I knew NOTHING. Having information like this available to first time home buyers is so important! And you included a ton of additional info! I felt like I was getting a mini-course in home buying – you know, I never thought about the part-time/full-time realtor thing and I think you make an excellent point about having someone on your side full time. Thank you for all the information!

    • Annette says:

      Hi Sara, Always my pleasure. There is so much that goes into making the biggest buying decision of our lifetimes. I’ve got lots of great stories to tell. Hope you’ll come back to visit again. 

    • Annette says:

      Thanks, Sara. Let me know if you have any further questions in the future or if you or anyone you know will need an agent. I have a very extensive referral network nationwide.

  2. Thank you for the great enlightment, with this your article can enable someone to take the right step, if he/she are venture into such properties to acquire.
    Well thought out, good job.

  3. Louise says:


    This is a really good article, it explains everything one needs to know about buying property and the benefits of using a buyers agent. In the UK we don’t have buyers agents but I can fully appreciate how valuable they would be.

    There is endless paperwork involved when buying houses so to have an agents dealing with that for you would clearly make things a lot easier and quicker.

  4. Brent says:

    Thanks sharing this article on wo pets buyer’s agent. I must say this article is really informative and helpful when it comes to the use of agents especially in area of acquiring house and landed properties. I never knew the advantage of making use of an age but now I know. This is really an informative article to read. Thanks for sharing.

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