Finding A Buyer’s Agent, Part 1: The Search Begins With Ourselves

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We’ve been slowly moving forward with the home-buying process, but I’ve fallen behind on the updates. We are far from experts and we might have done it all wrong, but here’s how we found our buyer’s agent to represent us. We started by essentially interviewing ourselves.

Preliminary Research
First, we had to see what was out there. We went on Open Houses every single weekend for months. We looked at houses in “bad” neighborhoods, “good” neighborhoods, and everything in between. We looked at homes priced from $260,000 to $3,800,000. High-rise condos, nice townhouses, detached houses, even a shack with no water heater (but great lot). Close by and far away.

Next, we used online resources such as MLS listing websites. These days you can get a ton of information online in most metro areas, including e-mail updates of new listings. However, I am always suspicious that these sites are somewhat delayed compared to what real estate agents who pays hundreds of dollars for “real” MLS access gets. But by poking around online you can find recent sold data, tax records with previous sales history and home sketches through the city or county, and more.

By combining the real-life visits and the data available online, we started getting really good at doing our own home appraisals. By taking careful note of prices, price drops, whether the house sold or not, and for how much they sold for, we got a feel for the housing markets in different areas. We would predict whether a new listing would be sold within a week, or if it would languish for months. This allowed us to help narrow down what we cared about, and how much each separate feature might cost us.

Oh, and we asked our friends a lot of questions. 😀

Deciding On Our Needs
This helped us figure out what we wanted from a buyer’s agent:

  • Access to homes. Real estate agents will often give each other lockbox codes with no problems, but not just random people calling them up. This can get us in faster, and often with less hassle.
  • Shield us from other agents. When a listing agent sees a buyer without an agent, what they see is potential client to show other houses too. They start asking more questions about what we do, what neighborhoods we’re looking at, and so on. We just want the facts on the house.
  • Guidance after offer acceptance. Our parents, brothers, sisters, friends – they all have bought houses. I’ve read enough books to know what the steps are and what the terminology is, but it’s still good to have someone who’s done it 100 times before and seen all the potential hiccups.
  • Patience. I would be upfront with the fact that we were going to be direct and picky buyers. We don’t want to see every house, just the select few that meet our criteria. We want to see a house, decide on a price we were willing to pay, and make an offer the same day. If they refuse, then we move on. If we don’t see a house we like for months, then that’s also fine with us. In that way, we didn’t need to be called every day or feel pressured. But if something did come up, we would be willing to move fast. We have the down payment and mortgage pre-approval ready to go.
  • A second opinion and another set of eyes. I have a father-in-law that can just about build a house by himself, so that helps us a lot. But just having an experienced person point out flaws or features can be great.

Now, could we find such a person, and perhaps even get a commission rebate? I mean, we are talking about a $500,000+ home here. It turns out we could, and we did. (To be continued in Part 2.)

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  1. mhesidence says

    “To be continued in Part 2” argh, don’t tease like that.

    Its nice to read someone who knows what they are doing even, espeically since its their first time.

  2. 500+? I thought the budget was 500? Is that “+” worth a couple grand, or a couple hundred grand?

  3. As has been mentioned in your “Commission Rebate” post, the thing you’re really paying for by hiring a Buyer’s Agent is knowledge of the process and experience. I would be very careful about who you select as your Buyer’s Agent. Your needs are mostly on target, but the primary need should be someone to advise you before and during the OFFER WRITEUP. An agent worth their salt should be able to advise you in detail on your options when writing an offer and how to negotiate most effectively. Real estate is not necessarily like other types of negotiating, and having some experience at knowing the seller’s motivations can save you the buyer tens of thousands of dollars.

    I understand your desire for a commission rebate, but be careful to select an agent for their qualifications and not just their compensation. As someone mentioned earlier, in most states the seller pays the Buyer’s Agent compensation. If you get this money as a rebate and not just a reduction in the commission the seller pays, you may encounter tax consequences. I believe it would depend on the state, but that rebate is viewed as earned income in many places. You could also negotiate with the seller to just reduce the commission they are paying to the Buyer’s Agent if you clear it with your agent first. The problem with that is most sellers aren’t necessarily willing to pass on those savings to you when negotiations begin.

    From BuySide’s website:

    In the fine print….

    A Rebate may have tax implications. BuySide recommends that buyer consult with a tax advisor regarding same. To the extent, if any, that BuySide determines that the filing of any tax return (including any Form 1099 or other information return) is necessary or prudent in connection with any Rebate, BuySide may make such filing.

    So, long story short, plan for a 1099 if you get a rebate. This might be avoidable if the rebate is applied to the cost of the property or closing costs on the HUD-1 Settlement Statement, but that will also reduce the closing costs that the lender will allow the seller to pay if negotiated in a slow market (usually 3% max). If you really want to save time and hassle, interview agents based on their qualifications first, ignoring what they plan to charge. It may save you in the end.

    For full disclosure purposes, I was in real estate for 3 years full-time, but am now back to my primary career. If I were buying today for myself (still licensed), even I would hire a Buyer’s Agent for the experience in the current market.

  4. One more thing…hiring a Listing Agent (Seller’s Agent) is completely the opposite. Negotiate hard and do your best to get a discount on your side, but ALWAYS offer 3% to any Buyer’s Agents to make sure your property gets shown often.

  5. If possible buy a house you can grow into without having to expand or renovate. The stress and anxiety of working with a contractor are not worth it.

  6. My wife and I used a Buyer’s Agent for our first home purchase and were satisfied for the most part. One mistake we made, however, was using the home inspector our Agent recommend. I was never comfortable with that decision, but we were pressed for time, so I end up using him. I won’t go into details, but suffice to say we were less than impressed in the end (by the inspector). I’d recommend getting your inspector selected and lined-up early on in the home search process. Lots of those guys are worthless (it’s easy for most average joes to get certified). I’m not saying ALL agent recommended inspectors are worthless, but why take the chance? Do your own research. Angieslist might be useful depending on your location.

    Sorry for the rant, the only thing that makes me feel better about our mistake is by sharing out experience with others in the hope that they won’t make the same mistake!

  7. chris’ post has some merit. when your realtor recommends someone, they are often recommending someone they use a lot, are friends with, get a kickback, etc. this person may not necessarily be the best person for the job. if youre in a bind for time, take it. if not, ask your own friends who they recommend.

    you CAN find a good agent who does everything you want. DONT skimp on the commission when you are buying, the seller pays for this. rather, offer a lower price on the house or for closing costs to be reimbursed. a lower selling price automatically lowers commissions and you no longer look like a cheapskate to other parties involved.

    hold out and buy a house you love, theres a lot of inventory and you have atleast another 6-12 months where not much will be selling…

  8. You don’t mention what you would do with a counter-offer. I agree with you about moving on after an outright rejection but part of the house buying process is negotiation. I have bought and sold a number of houses over the years and the best buying strategy has always been (except in very hot markets) to offer just a little less than you are willing to pay to begin with. If they came back with a counter-offer that is still more than you are willing to pay, you have room to make one more offer. Sometimes the seller just needs to see a little bit of movement is his/her direction to feel good about doing the deal. And sometimes the first low offer is accepted so you get the house at a great price. I don’t go past two offers, however; unless the difference is something trivial like $500 or so.

  9. Good post. Personally, I think you’re doing too much work, though.

    One thing you left out: look at the schools.

    Also, pay more for location. You’re no different than the potential buyers when you go to sell. If you don’t like the area, nobody will.

  10. I’m not a realtor, but I think it’s pretty unreasonable and selfish to request a rebate as a buyer. As a seller it is a different ballgame as it is your property being sold. As a buyer, you will be spending possibly a few months or more with the agent and expect him to pay you after he has helped you find a home. I like your blog and all, but I find this to be a low point.

  11. Can anybody offer any tips on buying new houses? How would one approach the seller in negotiating for a better price? Would you recommend going with the builder’s financing? Thanks!

  12. Why would a buyer want a rebate? That’s like you paying your boss for allowing you to work for them….sounds a little off to me. If they are offering a percentage back, be careful not to end up offering more on the home than you would if you weren’t “being paid to buy it”.

  13. Most realtors give a rebate without the sellers asking for them …. at least 1%-1.5% of their commission towards closing cost here in Northern Cali because of the prices of homes are so high. In the midwest where houses are only 200k, 3% is only 6k. Here 3% on a 500k house is 15k so even working on 2% commission, their fees are still higher than realtors working out in the midwest. Its not just about % of commission but also on the price of your purchase.

  14. Thanks for the tips!

    I’m going to save justifying a commission rebate for later. For now, let me say that I don’t think there is anything wrong with anyone negotiating one’s pay rate. I don’t think it shows a lack of skill, or experience. It might be harder to find a good one, yes! But we are quite satisfied with our agent, and would put her up against any other “full price” agent anyday.

  15. Ungar, when your talking about buying a new home, you mean from a builder, such as KB Homes? When buying a new home, builders will sometimes offer incentive, could be up to 40K, to use towards upgrades and sometimes used for closing cost. I don’t think you can negotiate price but incentive you can. I’m sure builders are offering really good incentives right now. You have to keep checking up with them. Big developers sometimes offer financing with rates better than other lending institution cause they can and it also helps out the buyer. I see nothing wrong going with them, if the rate is the best out there.

  16. I am a real estate agent in CT.

    First of all, in CT and many other states a real estate agent cannot give another unlicensed person a fee for most real estate services. I do not think you can get someone who is not your friend to kickback anything to you. Maybe CA is different?

    Also in CT, an agent cannot legally allow an unrepresented person into a house unless they have filled out an acknowledgment that they are in fact unrepresented or unless they represent them. A joe off the street can’t go to a random house with a lockbox and go in. The owner typically has not given permission for this to occur. If you were selling your house would you want just anyone walking in?

    If you don’t have an agent and go to an open house, just say you are working with so and so from X realty and they will leave you alone immediately. They don’t know if it is true or not.

    The listings you see on sites like are stale. They aren’t supposed to be but they are. There are many homes that appear to be active listings but are actually under deposit or even sold. I would continue to use such sites until I had a real estate agent but would not assume that they are still available. I have had clients say “but I just saw it on the website” and then I investigate and it has been gone for some time.

    Get an agent that you like, that is a good negotiator, has experience and has time for you. Because I read your blog I think you will want someone who is responsive and knowledgeable.

    If it is part for the course to negotiate money back from commissions, you should go for it. Otherwise, I would pick the person that is going to get you the deal, has established relationships and knows the tricks. How about financing closing costs, inspection modification agreements to get cash back at closing, etc.

    Good luck!

  17. It’s funny how even when you know exactly what you want, you still get lots of advice. That’s an encouraging sign — it shows that you have a lot of people you don’t know looking out for you, thanks to all the great information you’ve shared in your blogs. Congratulations on finding a good agent, and good luck with your home-hunting. I had a great one when i sold my home and it makes a world of difference, even when a buyer is as informed as you.
    It shouldn’t be too difficult finding something you like given the current housing inventory. Happy Home Hunting!

  18. See for more info. Recently i’d been to auctions, oh man! house in million$ communities were auctioned for just 250-300K. Goodluck in finding a house.

  19. You should negotiate the commission you pay the buyer’s agent. Although the seller technically pays the agent fees, they are included in the house’s selling price. So, ultimately the buyer is the one paying for those fees. Also, there are now far fewer buyers than sellers, agents should be willing to give back a little to be competitive and get your business. But you should always be fair; realtors have to eat, too.

    In today’s market, houses that are posted online will not go “stale” as quickly as they would have a year or two ago. People are waiting to see how low a price will go before making an offer. Unless a house is significantly under priced or spectacular house that will not be seen anywhere else, the likelihood that it would be sold before a potential (who looks daily) can see is low, IMHO.

  20. What CT says is correct. A lot of the listings are not updated on A site I found that is real user friendly is It will list out all the schools close by and their API scores or if that is not relavant in your case then you can search by neighborhood to see all the listings in one area. It also shows you the comps, neighborhood data crime rate, sales to list ratio, etc etc.

  21. Our agent gave us access to the MLS web site she used. We used it like a search engine and found houses we liked to see. That saved us a lot of time!

  22. I think it’s getting to the point that real estate agents should start working for a flat fee. 3% of 500k is absurd for a buyers agent. You can find all the properties online, select the one you want. Then pay a Lawyer $2000 to make legal offers, and do all the paper work.

    We are getting ready to start looking for a house, and agents are coming calling to us. Here’s my new rule: no exclusivity agreements. If you find me a place that I didn’t find myself we can do business. But I’m not paying you 3% because you delivered my offer to a title company, on a house I asked you to show me.

  23. Skip the middlemen. Get to know the area yourself and buy your home directly from the seller. When my wife and I were looking to move from our townhouse into a larger home we happened to have an aquaintance who was looking to sell. I picked up the necessary sales documents at a stationary store and used our old documents as a template to complete the paperwork. The owners accepted our offer and we went into escrow.

    I found that the title company really does most of the work during a property transaction. We completed the entire transaction without a real estate agent getting involved…the commission money that we saved was split between ourselves and the sellers. We’ve lived in the house for 4 years and have never regretted the decision.

  24. It really varies by area. Here in CT the agent/lawyer do everything and the title company does almost nothing. Did you know that title insurance companies kick back money to closing attorneys? Guess what a typical split is: 60/40 where the attorney gets 60!

    85% of houses are sold via the MLS. This leaves 15% of deals to be done outside. You should consider all options but don’t neglect the place where 85% of houses are sold. For Sale by Owners

    Matt would like to find the house he wants and not pay a buyer’s agent. Do you know what happens then? Does he get refunded 3%? No! The selling agents gets it all! The way it works in most areas is that the listing agent gets the whole 5-6% commission and they choose to split it with the buyer’s agent. No buyer’s agent = no splitting. What is 3% of 500,000? It is $15,000. Choose an agent that can negotiate and get you at least $15,000 off of the selling price! Not difficult in today’s market. Can you negotiate as well on your own?

  25. I don’t think it’s so wrong to ask for a rebate, but I’d rather get their advice on how to come up with the lowest acceptable offer because it could work out even better that way. If their rate is 3% and the house is 500K, you’re paying them $15K — but if they can get you the house for $485K, then you both get around $15K, that’s just as good. If they are willing to give up a % and give you another 5K, that’s nice but in the scheme of things doesn’t matter that much. You are locking into a mortgage for many years, an extra $5K won’t change your mortgage payment very much and having a good agent is well worth that. Take that from someone who bought a FSBO and regretted every minute of it — and still regrets buying in the wrong school district. Two things I would never do again.

  26. My wife is an agent in VA. I know she wouldn’t have a problem negotiating a rebate, after all, you should get the best deal possible. I would also caution against not using an agent, especially on your first purchase. First, you would think with as many closings as they handle, title companies would be able to do the deal without a hitch, but that is rarely the case. Issue upon issue comes up during the loan process that must be handled quickly, and documents must be picked up, signed, and dropped off. Also, a good agent should be able to write a much stronger contract than a mass produced office supply version, that will protect you much better should anything go wrong.

  27. You can ask a mortgage broker to knock down his fees, why can’t you ask your realtor? There are brokers that charge 1% v/s others at .5% and can be equally good. Same goes for the Realtors.

  28. CT brought up a good point. Most sales contracts have a clause that says if they bring a buyer, or the buyer doesn’t have an agent they get a bump in commission. But you as the buyer can control this. It may come out of the sellers money, but in the end the buyer is paying for the house so they are paying both agents.

    First time buyer: Use an agent. But make sure it’s a good one. I think the ratio of crap agents to good agents is 4 to 1. (no science here. I’ve use 5 agents and only one twice.) A good agent will make things fast easy and clean.

    And if you happen to be looking for a place in Houston TX: I highly recommend Sandra Gunn. She helped us buy when we moved there, and sell when we left. She restore my faith in the agent business. Then we got to Denver and the garbage started all over again.

  29. Sorry CT, I forgot the rest of the retort. Have a lawyer act as your agent. Then the seller agent doesn’t get a bigger chunk of the pie for doing nothing. And if your selling. Take this caveat out of the contract. If they say you can’t: find another agent.

    In full disclosure, I paid Sandra Gunn the extra 3% when she was our listing agent. But she brought a cash buyer in a down market, and we were under contract in 10 days. That’s what I call earning it!

  30. Sandra sounds good, Matt. The local association of realtors decides the listing contract and the multiple listing service rules. An attorney can act on your behalf in a real estate transaction without real estate agents but if a property is on the MLS you have to have real estate agents. At least in CT!

  31. Before I bought my place last April, I had looked at homes/condos for three years and worked with 5 agents. Although, i liked some agents and valued their experience, I did NOT find it worth the 3% commision. I strongly believe that the commision system does not give a buyer’s agents enough incentive to serve in the buyers interest. I found that i could find and negotiate a better deal without a buyer agent and that a real estate attorney could protect me way more than a real estate agent.

    I eventually bought my place without a buyer’s agent and asked for 3% discount on price in addition to a negotiated price. I was able to get a real estate lawyer to handle my closing and advise me on the process for free (employer benefit).

    I also found tons of public information to help me set a good offer. I searched all tax/sale records online (king county recorder office has a fabulous website). I also found that websites like zipreality and redfin had updated info from the MLS and were updated pretty frequently.

    The hardest part was viewing the units, i had to go to open houses (redfin or jonlscott will list open house dates) or call the agent to setup a time to view (redfin will give you the number of agent). Most agents didn’t care that i didn’t have an agent and eagerly showed me the properties. This is totally a buyers market (even in the northwest) and I really wouldn’t worry about an listing agent not taking you seriously because you don’t have an agent.

    just my two cents. good luck with the house hunting!

  32. Redfin Redfin Redfin!!!!!

    Your website is an inspiration every time I visit!

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