3 Ways a Home Buyer's Agent Can Save You Thousands

Most first-time homebuyers don't even realize that there are two agents involved in nearly every real estate transaction. I've spoken to hundreds of friends, family members, and even strangers online and in person that have no idea they can have their own agent help them buy a house. Most of them figure they will contact the agent that listing the property in order to buy that home, but that's not always the case. While any homebuyer can do it this way, this really isn't beneficial for the buyer. Think about it, the listing agent has one job, to sell that particular home. While it's not necessarily an ulterior motive, the truth of the matter is that agent is working for the seller first and the buyer second. So who do you think they're going to be more loyal towards?

I am an advocate for every homebuyer to have their own representation when purchasing property. There are multiple reasons why this is a good thing but I'm going to give you four ways a home buyers agent can save you thousands on your next real estate purchase.

#1. A buyers agent costs nothing for the buyer.

Now, most buyers are very hesitant about this statement because they figure that someone has to pay the agent, right Russian Mark and, while this is true, the commission comes from an unlikely source… The seller, not the buyer. Well, that gets a little tricky to but let me explain.

When a homeowner decides to list their property they enlist the help of a real estate agent or broker. That agent writes up a listing contract and the two parties agree on a commission. That commission is typically around 6% of the sale price of the home, not the list price. But, that commission is often split between the agent listing the property in the agent that brings the buyer or the buyers agent. Typically, this commission is split right down the middle, 3% for the listing agent and 3% for the buying agent. However, it really could go anyway. Often times, listing agents will choose to take only 2% of the commission while offering a buyers agent 4% or any variation thereof. When the house sells, the deal is closed and monies are dispersed, including commissions split to both agents. The money technically does not come out of any of the buyers closing costs so in a sense, the buyer is utilizing their agent for free.

If a buyers agent helps a buyer purchase a home that is not listed with the listing agent the agent can negotiate with the homeowner to obtain some form of commission for facilitating the transaction. Usually asking the buyers to cough up the commission is an extreme last resort but not completely out of the question.

#2. A buyers agent keeps your finances confidential.

I will give you a scenario: an agent that's representing buyers knows that those buyers can afford up to $500,000 on a home according to their lender. However, they want to purchase a home that's been on the market for about three months that's also listed at exactly $500,000. The listing agent and the homeowners have no idea how much the buyers can actually afford so the lender writes up a customized preapproval letter for the exact amount that the buyers want to offer. The buyers want to offer less because the home is been on the market for a while so they choose to offer $470,000 accompanied by a preapproval letter stating that the buyers are approved up to $470,000, no more, no less. At this point, the listing agent and the seller have no idea that the buyers can actually afford more and because the home is been on the market for some time, either counter for a little bit higher or agree to the $470,000. This just save the buyer $30,000 on the purchase of their home keeping cards close and negotiating strategies confidential. [Source- Buyers Agent Sydney]

#3. Buyers agents have the buyers interest at heart.

As a buyers agent, our goal is to protect buyers at all costs. We negotiate for buyers for their terms, personal property is being sold with the home, and for the right price. Listing agents simply want to sell the house whereas a buyers agent will be honest with buyers about potential hazards, problems, and shady business deals that listing agents and homeowners have been known to pull. Your buyers agent has your back and will help explain everything throughout the process, hold your hand when necessary, and warn you of any red flags throughout the transaction. Having someone on your side and in your court during a real estate transaction is priceless.

So, as I've always said, why would anyone not use a buyers agent when purchasing property? Finding someone that has experience in your neighborhood that you choose, works on your behalf, and is an expert at negotiating is really the best way to buy a house.