Buying a home is one of the most significant financial decisions of your life. It can also be complex and overwhelming. To navigate the process as smoothly as possible and make the best decision, you need to be aware of a seemingly endless amount of factors.
That being the case, it’s smart to work with a trained and licensed real estate agent throughout the homebuying process. No matter how much you know about the housing market, construction, and negotiating — or how much you think you do — partnering with the right real estate agent can be a godsend when you’re buying your first home.
With all this in mind, let’s take a closer look at what real estate agents are, what they bring to the table, and the pros and cons of hiring one to buy a new home.
What is a real estate agent?
A real estate agent is a licensed professional who helps buy, sell, or rent properties for their clients. Real estate agents serve as intermediaries for buyers and sellers and provide expertise and assistance throughout the transaction.
When it comes to buying homes, the vast majority of consumers opt to join forces with real estate agents. In fact, the latest data reveals 86% of buyers purchase a home through a real estate agent or broker. What’s more, 89% of buyers would use their agent again or recommend their agent to others.
What are the benefits of being a real estate agent?
Before you decide to work with real estate professionals, it helps to understand more about the profession and the role agents play.
Despite what you may see in the media, most real estate agents will avoid attempting to push you into a home you don’t want or scam you into agreeing to buy a property that isn’t the right fit for your needs. Most agents register through the National Association of Realtors and pledge to act ethically and professionally. Their reputation is paramount to their success.
Having second thoughts about why someone would want to launch a real estate career? Let’s take a look.
Make your own schedule
One of the top reasons people work in real estate is to become successful and launch their own real estate business. When you have your own business and become your own boss, you can set your own schedule, control your working hours, and achieve a work-life balance. Real estate agents typically work flexible hours, giving them more of a personal life.
Control your income
Real estate agents have unlimited income potential. In real estate, earning potential depends on having a solid business plan (such as working with home buyers or commercial real estate investors), operating in a desirable market, figuring out how to successfully navigate slow periods, and staying motivated to meet clients and sell houses.
Help others
Buyer’s agents typically love working with people and helping them land their dream homes. By working in real estate, agents can directly impact clients’ lives and improve their standard of living. It can be a truly gratifying line of work.
Why homebuyers use real estate agents
Buying a home is stressful. According to one recent report, top fears for first-time homebuyers include missing out on better options (40.4%), being unable to afford a mortgage (36.8%), and rising home prices (31.6%). Of course, the list goes on and on.
A good real estate agent serves as a go-to resource for homebuyers and helps to alleviate any potential uncertainty. The right agent will listen to all of your questions and concerns and help make the purchasing process easier, more predictable, and more enjoyable by supporting you from the beginning of your search to closing.
Search for properties
As you begin house hunting, real estate agents can tap into multiple listing services (MLS) databases and other lead generation resources to help you find a home that matches your preferences and needs.
Often, agents get exclusive access to new properties before they hit the general market. As such, you may be able to find homes for sale before other buyers even know they’re available. In real estate, timing is everything, so early access can be as good as gold.
Provide market knowledge
In addition to discovering properties, agents also have in-depth knowledge of their local real estate market. This includes things like sales data, neighborhood information, and pricing trends. Using this information, you can gain a better understanding of property values and market conditions, which should help you make more informed decisions.
Show properties
Agents are responsible for finding properties and allowing buyers to visit different homes. As you continue your home search, your agent will let you into houses, give you tours, and help you answer any questions you might have. Spending time with the agent also helps them get to know you better, which makes it easier for them to recommend other properties that match your needs.
Negotiate with sellers
Worried that you’ll have to negotiate to land your dream home? Don’t be. When you hire a real estate agent, they negotiate on your behalf, working to get the best possible deal on a property’s price and terms.
Assist with contracts
Real estate contracts can be very complex and full of legal jargon. Agents help you understand your contract inside and out and make sure you know your rights and obligations before signing on the dotted line.
Liaison with other professionals
Homebuyers are typically busy working professionals and must balance other family and work responsibilities while looking for a property to buy. Real estate agents can help you save time by working behind the scenes and looping in other professionals in their networks — like mortgage lenders, attorneys, property managers, appraisers, and inspectors — so you don’t have to. As a result, they can help keep the process moving forward while you manage your day-to-day responsibilities.
Provide post-purchase support
The first year of homeownership is challenging. It’s not uncommon for new homeowners to have questions about things like homeowners association (HOA) fees, what to look for in lenders, and what upgrades you need to make after you close. A great real estate agent will provide post-sale support and help you transition to homeownership.
Remember, reputation is everything for real estate agents. The right agent understands this perfectly and will work tirelessly to help you make a wise decision and end up living in a house you love. Such an approach increases the chances you recommend your agent to folks in your own network when the time comes.
How to find a real estate agent
The agent you hire will have a significant impact on your homebuying experience. As such, it pays to take your time and conduct thorough research before choosing one. With that in mind, here are some tactics to consider as you hunt for a real estate agent.
1. Ask for referrals
Start by asking for recommendations from colleagues, friends, and family members with experience buying and selling property. You can also hop on to local message boards and ask your community for their advice. Whether you know them or not, other homebuyers can provide valuable insights and introduce you to reliable agents.
2. Search online
Unfortunately, referrals may not always be available in your area. For example, you may be moving to a new market where you don’t know anyone. Other times, you may want to start fresh with your own agent because you’ve heard horror stories about other agents. In these instances, you can use the internet to search for agents in your area on sites like Zillow and Trulia and read reviews about them.
3. Contact local real estate offices
Another way to find a real estate agent is to visit a local realtor or contact one over the phone. An office manager will ask some basic questions and connect you with an agent who may be able to help.
4. Attend open houses
Another way to connect with real estate agents is to attend open houses in your target area. This will allow you to connect with an agent on-site. You never know when a simple decision to show up at an open house could change your life.
Best practices for working with a real estate agent
You can’t just hire any real estate agent and expect a productive, joyful experience. Keep these tips in mind to increase the chances you hire the right agent and end up buying your dream home.
Research thoroughly
Always take the time to research a potential agent — even if that person comes as a recommendation. Not only will you want to verify their licensing and credentials, you’ll also want to read some online reviews to make sure they can meet your exact needs.
For example, not all agents are great communicators. If you’re not necessarily the most patient person in the world, you might want to work with an agent who instantly returns your calls and texts and also checks in regularly. In this scenario, try to get a sense of their responsiveness before committing.
Interview the agent
After you’ve narrowed down your options, schedule a formal interview with a prospective agent. During the interview, ask about their experience and determine their overall knowledge of your local market.
As a word of caution, be careful about working with new real estate agents who may lack experience. These folks may be unable to offer the same level of guidance and expertise as a seasoned veteran.
Respect the agent’s time
Time is valuable for a real estate agent. So, if an agent clears an afternoon to arrange a series of home visits, make sure to respect their time by showing up, taking notes, and asking questions. Remember, agents don’t get paid until you make a deal.
Be prepared to sign an exclusive agreement
A real estate agent will usually ask you to sign an exclusive buyer agency agreement. Essentially, this document indicates that you agree to work exclusively with the agent or real estate brokerage and allow them to represent you in your property search and negotiations.
This agreement outlines the terms and conditions and length of the arrangement, as well as the agent’s responsibilities and compensation. If you end up partnering with the wrong agent, you can always dissolve this agreement and find a new agent.
The pros of working with a real estate agent
At the end of the day, you have the freedom to decide whether to work with a real estate agent or handle the homebuying process yourself. Here are some of the main reasons why first-time homebuyers would be wise to work with an agent who knows the real estate industry like the back of their hand.
Save time and money
There’s no getting around it: Real estate is hard work. A real estate agent will save you a significant amount of time during the homebuying process by recommending properties, coordinating visits, and handling complex administrative tasks.
In addition, using a real estate agent can potentially save you money. These folks can negotiate with sellers and their agents and use data to determine a property’s fair market value. In addition, real estate agents can access off-market or pocket listings that aren’t publicly available, which may offer better deals and reduced competition.
Receive guidance and support
Despite what you might see on social media, real estate is not simple. The truth is that most first-time homebuyers don’t have the experience necessary to navigate the buying process on their own. After all, buyers need to comply with tons of legal and financial requirements, which can be very time-intensive. Agents make this complex process easier to navigate by providing ongoing guidance and support until a deal is done.
Get objective advice
One of the best reasons to use an agent is to receive objective advice about different properties. Agents can help you see the advantages and disadvantages of different places — enabling you to make decisions that aren’t heavily impacted by emotions.
For example, a property you might see as a dream house an agent might see a money pit. A savvy agent will be able to ensure that you walk away with a house that you love and a commitment you can live with.
Leverage connections and resources
Agents often have real estate teams full of mortgage brokers, contractors, inspectors, assessors, and other professionals. As a result, they can usually recommend other trustworthy professionals throughout the homebuying process to help facilitate the real estate transaction. Since you’re going to be researching so many properties anyway, you might not want to spend your time finding a plumber.
The cons of working with a real estate agent
Despite these advantages, working with a real estate agent can be challenging at times. Here are some of the potential drawbacks to working with a licensed buying agent.
Pay a commission
Real estate agents work for buyers. They often put in a ton of effort, so they don’t come cheap. Agents typically earn a commission of around 5% to 6% of a property’s sale price, with the buyer’s agent and seller’s agent splitting the fee. While you won’t have to pay your agent directly, the funds come out of the sale price, which could cause a seller to list their home for more money.
Before hiring a real estate agent, make sure you understand their commission structure. That way, you can avoid any surprises during the closing process.
Avoid a conflict of interest
While it’s rare, an agent may encourage you to make a higher offer on a property in order to close a deal quickly and put more money in their own pocket faster.
If you suspect the agent is acting unethically, remember that you don’t have to rush into a decision regardless of what the agent says. Ask for a comparative market analysis report to verify the market value and seek other opinions if necessary. You can also talk directly to the brokerage the agent works for. Of course, if you still feel uncomfortable with the agent’s actions, you can always walk away from the deal and find another agent.
Work around the agent’s schedule
Coordinating schedules and finding time to drive around and visit different properties with an agent can be challenging. Because of this, it’s a good idea to treat the house search like a part-time job and budget your time accordingly. Be honest about your schedule and maintain open channels of communication.
Trust the agent to handle negotiations
When you hire a real estate agent, you need to trust them to act on your behalf during negotiations and protect your interests. The agent will also be responsible for handling your sensitive personal information.
With this in mind, proceeding with an agent you trust and feel comfortable working with at every turn is critical. Otherwise, you may have to switch agents or realtors during the house search — delaying your purchase and potentially causing you to miss out on properties you love.
Looking to become a homeowner? Home Approach can help
Hiring a real estate agent is just one of many important decisions you’ll have to make during the homebuying process. Before you close on your new home, you’ll need to decide if you want a homeowners association (HOA), figure out how to secure financing, and determine what you want in a neighborhood, among countless other decisions.
During this process, you’re bound to have some questions. Before starting your real estate journey, we recommend checking out our free guide for first-time homebuyers which explains everything you need to know about becoming a homebuyer, including tips on negotiating a deal, hidden homeowner costs, unforeseen challenges, and much more.
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