What Does a Buyer’s Agent Do Exactly, and How Do I Find One?

The 2024 FHA Loan Handbook

A buyer’s agent can help you find a home, research the asking price, submit an offer, and negotiate with the seller.

You’re not required to use a real estate agent when buying a home. But you could benefit from it in many ways. This guide explains what a buyer’s agent does, how they get paid, and everything else you need to know before signing an agreement.

The Different Types of Real Estate Agents

As a home buyer, you need to understand the different types of real estate agents and the various roles they perform. You also need to know who they represent. Here are the three main types:

  • Buyer’s Agent: This individual works exclusively with the home buyer. Everything they do is in the best interest of the buyer. A buyer’s agent will guide you through the home buying process from start to finish, helping you to make a smart purchase.
  • Listing Agent: Also known as a “seller’s agent,” the listing agent works for the person who is selling the home. They have the seller’s best interests at heart. The seller’s agent wants to sell the home as quickly as possible and for the best possible price.
  • Dual Agent: There’s a third category called the dual agent. This agent represents both the buyer and seller within the same transaction. Some states in the U.S. forbid this practice, and that alone should make you think twice. 

We encourage home buyers to use a buyer’s agent. That way, you can rest assured that they are looking out for you, and you alone.

What Real Estate Agents Do for Buyers

The role of a buyer’s agent is fairly simple. At least in theory. Their primary duty is to help you find a house that meets your needs, and to facilitate the purchase of that property.

The buyer’s agent plays an important role throughout the home buying process, but especially during the early stages.

Here are 10 things a buyer’s agent should do for you:

  1. Bring you up to speed on current market conditions in your area
  2. Help you establish reasonable expectations based on your budget
  3. Screen all homes for sale in the area to identify candidates
  4. Accompany you on tours of properties including open houses
  5. Estimate the market value of a home based on comparable sales
  6. Write up the purchase offer and submit it to the seller or listing agent
  7. Help you negotiate with sellers and handle counteroffers as needed
  8. Facilitate the scheduling of the settlement or closing process
  9. Regularly communicate with all parties to keep the process on track
  10. Accompany you on a “final walk-through” of the house before closing

This list represents the bare minimum of what a buyer’s agent should do. Some may go above and beyond to perform additional duties for their clients, and you would be fortunate to find such an agent.

Agent Commissions and Who Pays Them

In most cases, the seller pays the real estate agent commission(s) out of the money they make from the sale. Just remember that in the real estate world, everything is negotiable. And that applies to the agent commissions as well.

In the past, a commission of 5% – 6% was standard for the services provided by a real estate agent. This commission would usually be split between the buyer’s and seller’s agents.

But these standards have changed over the years. And a recent high-profile lawsuit involving the National Association of Realtors could has altered the landscape even further.

Today, real estate agent commissions can vary based on several factors, including the scope of services provided.

The bottom line here is that real estate agent commissions are negotiable and not set in stone. So feel free to ask a buyer’s agent about their fee and the services they provide to justify it.

À La Carte Real Estate Services

You’ve probably heard the phrase “à la carte” used in a restaurant context before, where menu items are priced individually.

But did you know there’s a real estate context for this phrase as well?

 According to the Federal Reserve Bank of Richmond:

“In the a la carte approach, sellers and buyers each pay their agents directly, and buyers pay their agents for each task separately, independent of the final price of the home bought. This compensation system allows buyers to shop for each service they need and bargain for the price.”

A common example of à la carte real estate services is when the home buyer finds a suitable property all on their own, but has the real estate agent help with the offer and negotiating process.

In this “stripped down” approach, the buyer’s agent only performs select services, rather than guiding their client through the entire process as described earlier.

The à la carte approach is not right for everyone. First-time buyers, in particular, are usually more comfortable having a buyer’s agent perform the full range of services. They want the “whole package,” from the initial home search to the final closing.

Just know that this pricing model does exist—and that it might become more popular going forward, due to the above-mentioned lawsuit and other industry changes.

How to Find a Real Estate Agent

For home buyers using mortgage loans, it usually makes sense to get pre-approved by a mortgage lender first, before speaking to an agent. Some agents won’t commit to working with buyers unless they’ve been pre-approval already.

Sure, they’ll respond to your inquiries. That’s just good business. But they probably won’t show you properties or invest a lot of time until you’ve been pre-approved by a lender.

The logic here is that a real estate agent could waste a lot of valuable time by working with a would-be client who can’t even qualify for mortgage financing. And that’s a valid concern.

So let’s assume that you’ve been pre-approved by a lender, and you’re now ready to work with a buyer’s agent. What’s next? How do you find an experienced real estate agent in your area?

The best way is to gather input from people you know and trust, like family members, friends and coworkers. Do you know someone who has purchased a home recently, in the same area where you want to buy? Start there.

Other ways to find an experienced agent in your area:

  • Ask for referrals: Talk to friends, family, neighbors, or colleagues who have recently bought a home for recommendations on their buyer’s agent.
  • Use online real estate platforms: Search Zillow, Trulia, Realtor.com, or similar platforms. Filter by location and look for features like reviews and specialties in working with first-time buyers.
  • Search the National Association of Realtors (NAR) directory: Find Realtors in your area with the NAR’s online search tool.
  • Explore social media: Look for local Facebook groups where people recommend real estate agents.
  • Join neighborhood social media pages: See if your neighborhood has social media groups where residents share agent experiences.
  • Follow agents on social media: Check out agent profiles on Facebook, Instagram or LinkedIn to learn about their work and personality.
  • Read online reviews: Look for reviews on real estate listing platforms and Google My Business.
  • Attend open houses: Meet agents hosting open houses and see if you connect with their approach.
  • Contact your mortgage lender: Some lenders have network connections with real estate agents they can recommend.

Most importantly, get everything in writing. This includes the buyer’s agent agreement, which outlines the agent’s responsibilities and how they will be compensated.

Finding Someone with Local Market Expertise

A real estate professionals should know a lot about the local area (city or cities) in which they work. In particular, your chosen agent should have a deep understanding of current real estate market conditions in the specific area where you want to buy a home.

This kind of insight can give you a much-needed advantage when it comes to finding a home, negotiating the sale price, and competing with other home buyers.

So, how do you measure for local market expertise? How do you find out if a real estate agent really “knows their stuff,” when it comes to current market conditions?

The easiest way is to ask them and see how they respond. You don’t have to grill them or frame it like a quiz. Just keep it casual and conversational. During your first conversation with a potential real estate agent, ask them what the market is like in your area.

A knowledgeable agent should be able to tell you:

  • Whether the local market currently favors buyers or sellers?
  • What the inventory situation is like and how it’s affecting buyers?
  • The average number of days homes are staying on the market before being sold.
  • Local home prices, including whether they are rising, falling, or remaining stable.
  • Insights into specific neighborhoods (amenities, schools, and development plans).
  • New construction or changes in zoning laws that might impact local home buyers.
  • How much of a house you’ll be able to purchase within your budget.

A knowledgeable buyer’s agent will be able to articulate this kind of information without “checking their notes” or doing a Google search. Working with such an agent could greatly increase your chance for success when buying a home.

On the other hand, if they can’t answer these kinds of questions, it shows they don’t keep up with local market conditions. And that could be a detriment to you as a client.

Understanding the Buyer’s Agent Agreement

A buyer’s agent agreement (a.k.a., “representation agreement”) is a legally binding contract between a home buyer and a real estate agent. It establishes a formal working relationship that outlines the rights and responsibilities of both parties throughout the process.

The contents of such an agreement can vary based on location and other specifics, but they usually include the following:

Duration and Scope: The agreement specifies the duration of the agency relationship, which typically ranges from a few months to a year. It might also define the geographical area where the services will be performed.

Exclusive Representation: It establishes that the agent will represent the buyer exclusively in the search for a property, prohibiting the buyer from working with other real estate professionals during the specified period.

Agent’s Responsibilities: It outlines the specific duties and responsibilities of the buyer’s agent. This might include conducting property searches, scheduling viewings, negotiating offers, and providing guidance throughout the process.

Buyer’s Obligations: The agreement might outline the buyer’s obligations as well, such as providing accurate information about their preferences, financial situation, and specific property requirements.

Commission Structure: The agreement will clearly explain the commission structure (how the agent gets paid). It should include the amount or percentage of the commission, along with when and how it will be paid.

Termination Clause: The buyer’s agent agreement might also outline the process for terminating the contract (by either party), including the circumstances under which this can be done.

Dispute Resolution: It may specify procedures for resolving disputes that may arise between the buyer and the agent during the course of the transaction.

The buyer’s agent agreement clarifies expectations and avoids misunderstandings. It spells out what services the agent will provide, how you’ll work together, and how they’ll be compensated. Read it carefully and ask questions before signing!

Brandon Cornett

Brandon Cornett is a veteran real estate market analyst, reporter, and creator of the Home Buying Institute. He has been covering the U.S. real estate market for more than 15 years. About the author

The 2024 FHA Loan Handbook