Why would you need a buyer's agent?

When you decide to look for a new home, you have three choices of how to go about your search. You can do it yourself, looking for "For Sale" signs and listings in the paper or online; you can call a real estate agent and have him find you places to see; or you can hire the lesser-known buyer's agent. The downside to doing it yourself is that you might not find the best properties if you don't know where to look, and the problem with a real estate agent is that he always has the seller's best interest at heart. Meanwhile, buyer's agents have your best interests in mind and keep everything you tell them confidential. Your buyer's agent would be able to negotiate prices for you, make sure that the property is inspected before you buy it and ensure that you have any representation you need. They're able to show you houses that are for sale by the owner, and not just houses being marketed by real estate agents.

It doesn't always cost more to hire a buyer's agent. While sometimes they do charge an hourly fee or a flat fee, many times they split whatever commission the seller is paying his listing agent. While it might seem that the agent would want to leave the price higher so that he can get a higher portion of the commission, mathematically the difference between $10,000 in the asking price is only a $150 difference in the agent's commission.


You can hammer out the details of your agreement with your buyer's agent in a formal contract. You can choose to utilize a limited agency agreement that says exactly how much the agent will earn, and whether he's entitled to any commission if you find the house by yourself. Normally, if the agent does his job well and proves helpful, buyers will give him some kind of commission regardless.