The Pros and Cons of Working with a Real Estate Agent
Home Approach
Key Takeaways
Should you hire a real estate agent? Explore the benefits and drawbacks of working with a licensed professional during the homebuying process.
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, you need to be aware of a seemingly endless number 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, partnering with the right real estate agent can be a godsend when you're buying your first home.
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.
What is a real estate agent?
A real estate agent is a licensed professional who helps buy, sell, or rent properties for their clients. They serve as intermediaries and provide expertise throughout the transaction.
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 them to others.
Why homebuyers use real estate agents
Buying a home is stressful. 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%).
A good real estate agent serves as a go-to resource and helps alleviate uncertainty. Here's what they do:
Search for properties
Agents tap into MLS databases and lead generation resources to find homes matching your preferences. They often get exclusive access to new properties before they hit the general market.
Provide market knowledge
Agents have in-depth knowledge of local real estate including sales data, neighborhood information, and pricing trends. This helps you make more informed decisions.
Show properties
Agents arrange visits, give tours, and answer questions—helping them better understand your needs over time.
Negotiate with sellers
When you hire an agent, they negotiate on your behalf, working to get the best possible deal on price and terms.
Assist with contracts
Real estate contracts can be complex. Agents help you understand your rights and obligations before signing.
Liaison with other professionals
Agents connect you with mortgage lenders, attorneys, inspectors, and other professionals so you can focus on your daily responsibilities.
How to find a real estate agent
The agent you hire will significantly impact your homebuying experience. Here are tactics to consider:
- Ask for referrals from colleagues, friends, and family members
- Search online on sites like Zillow and Trulia and read reviews
- Contact local real estate offices for agent recommendations
- Attend open houses in your target area to connect with agents on-site
Best practices for working with a real estate agent
- Research thoroughly: Verify licensing, credentials, and read online reviews
- Interview the agent: Ask about experience and local market knowledge
- Respect the agent's time: Show up for appointments and ask questions
- Be prepared to sign an exclusive agreement: This outlines terms, responsibilities, and compensation
The pros of working with a real estate agent
Save time and money
Agents recommend properties, coordinate visits, and handle complex administrative tasks. They can also negotiate better deals and access off-market listings.
Receive guidance and support
Most first-time homebuyers don't have the experience to navigate the process alone. Agents make it easier by providing ongoing guidance.
Get objective advice
Agents help you see advantages and disadvantages of different properties—enabling decisions that aren't heavily impacted by emotions.
Leverage connections
Agents have networks of mortgage brokers, contractors, inspectors, and other professionals they can recommend.
The cons of working with a real estate agent
Pay a commission
Agents typically earn a commission of around 5% to 6% of a property's sale price, split between buyer's and seller's agents.
Potential conflict of interest
While rare, an agent may encourage a higher offer to close a deal faster. Always ask for a comparative market analysis to verify values.
Schedule coordination
Coordinating schedules to visit properties can be challenging. Treat the house search like a part-time job and communicate openly.
Trust required
You need to trust your agent to act on your behalf during negotiations and handle sensitive personal information.
Making the Right Choice
Hiring a real estate agent is just one of many important decisions during the homebuying process. Whether you choose to work with an agent or go it alone, being informed and prepared is key to a successful experience.
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