First Time Buyers: Choosing Your Agent
According to NAR data, most people find their agents through word of mouth and another 20 percent or so meet their agent by going to open Houses. Also according to the NAR, about
Most real estate agents only get paid when a deal goes through. Your agent's three percent commission will be paid by the seller, so there generally is no reason NOT to work with an agent as a first time buyer.
According to NAR data, most people find their agents through word of mouth and another 20 percent or so meet their agent by going to open Houses. Also according to the NAR, about 60 percent of buyers say they would use the same agent, so word of mouth is probably the best bet, but you may want to consider if the person referring the agent to you had similar needs to yours or if they would want a completely different style agent.
Going to open houses can be a good way to find an agent, as the agent who is hosting an open house has looked at the other homes that are on the market that are similar to the one you are looking at. But you may want to talk to two or three agents before you sign an exclusive agreement to work with one buyers agent.
The main benefits of working with an agent are:
Can open lockboxes to show you homes when its convenient for you.
Will write up your contract and act as your go-between in terms of gathering documents, scheduling the appraisal and the inspection etc.
Acts as a resource for you explaining terminology and procedures.
Has access to MLS listings before they become public.
Show you comparable sales to help you make a reasonable offer.
Advise you what to do next if problems arise.
If the idea that your agent only gets paid if you close the deal makes you uncomfortable, you arent the only one. Some agents can work as exclusive buyers agent, where you pay them a flat fee or a percentage to work for you, whether you buy a house or not. However, that agent may not be as motivated to work for you as they would be if they were dependent on the deal closing.
You can find a buyer's agent here.
What Is "Dual Agency?"
If you are going to open houses and decide to make an offer, the agent who is showing the house can act as a dual agent to represent both you and the seller as long as it is disclosed. However, since this agents compensation is completely tied up in you closing the deal, that can make things more complicated from a negotiation perspective. What generally happens is that an agent from the same office works with you for some part of the transaction, so that there is at least the appearance that your interests are being represented.
At the same time, the agent may offer you a credit of some kind, since they will be keeping the entire 6 percent commission from being on both sides of the deal.
If you think you know exactly what you want and have an attorney who can check out the contracts for you, then dual agency can work out great for you. Otherwise, better to have your own agent who wants to keep working with you even if the deal falls through.