A key member of your homebuying team is your real estate agent, who will accompany you through the entire process.
Choice of location and property requirements aside, there's complex information to understand, contracts to sign and endless jargon.
Selecting a real-estate agent to help you navigate this important journey can be key to a successful home purchase experience.
Take the time to find the right one. You’ll want an agent who not only is knowledgeable and well connected, but compatible and skilled at breaking down such common yet perhaps unfamiliar real estate terms as comps (data on similar homes to show you whether the one you want is priced right), active listings (homes for sale still on the market) and days on market (how long the home has been for sale) to ensure you understand them.
Compile a list of candidates
One place to start your search is on the Homes.com agent directory. The database stores information, including bios, the neighborhoods agents focus on, stats on the homes they purchased or sold on behalf of their clients and their state license numbers. You can contact them directly from the site.
Other ways to find agents are through referrals from your social networks. "I always tell folks to ask their friends and family who have purchased homes recently for a referral," said Maureen McDermut, an agent with Sotheby's International Realty in Montecito, California. "Then, do the due diligence to look up those agents online to see reviews."
As you search, you may find various terms for agents that at first may seem confusing: buyer’s agent, listing agent, seller’s agent, selling agent, dual agent, broker, Realtor, Accredited Buyer’s Representative. Here’s what they mean:
- Buyer’s agent: an agent who is bound by contract to represent the buyer
- Listing agent or seller’s agent: an agent who represents the seller
- Selling agent: the buyer’s agent who sometimes is referred to under the new designation once a contract with the seller is signed
- Dual agent: an agent who represents the buyer and seller in the same transaction in states that allow it
- Broker: an agent who manages the brokerage firm and other agents
- Realtor: an agent, who as a member of the National Association of Realtors, undergoes regular training and follows its codes of conduct
- Accredited Buyer’s Representative: an agent who passed a 12-hour course through the National Association of Realtors on the ethics and legal requirements associated with such duties as negotiating offers and handling closings
What agents do
Agents must be licensed in the states where a transaction takes place, according to the National Association of Realtors. The state issues the license, not the organization.
They should know the area or neighborhood you want to live in and have experience helping buyers who are in your particular situation, such as a first-time buyer.
Here's a list of their duties:
- Sending you listings from the Multiple Listing Service — the realty database of properties for sale in your locality — based on your preferences for architectural style, size, bedrooms, bathrooms, neighborhood and age.
- Accompanying you to open houses and home tours
- Helping you spot gems and duds
- Analyzing the market and using data such as days on market to help you determine whether to offer the asking price or above or below it
- Crafting the offer letter with the price, closing date and contingencies to nullify the deal if the appraisal comes in below asking price, if you don't get financing or if a major expensive problem turns up in the home inspection
- Providing comfort and encouragement when you lose out on a bid and getting you going again
- Negotiating with the seller when an offer is accepted
- Recommending an appraiser and inspector
- Preparing you for the closing
But there are a few things agents can't do. They're prohibited by the federal Fair Housing Act from giving clients information on schools and crime. The law is aimed at preventing agents from steering clients to or from certain neighborhoods because of their race or gender.
Pro tip: Should you suspect your agent is violating the law, you can file a complaint with the U.S. Department of Housing and Urban Development. You can find information on schools and crime (in the neighborhood section) on Homes.com.
Interviewing candidates
After compiling a list of candidates, you'll want to narrow it down to the top three to five.
Check with your state's agent licensing board, real estate commission and local affiliate of the National Association of Realtors to determine if the agents' licenses have been suspended or if any disciplinary action has been taken against them.
Here are a few questions to ask the candidates:
- How do you scout properties?
- Can you refer me to appraisers, inspectors and home repair specialists?
- What's your experience in this neighborhood?
- What National Association of Realtors designations do you have?
- What's your experience with homes similar to the ones I want to purchase?
- What's your experience with bidding wars?
- How long have you been an agent?
- Are you privy to pocket listings — off-the-market homes for sale?
- What's your preferred method of keeping in touch?
- What's your negotiation style?
- What's your experience negotiating price reductions for clients?
- Can you provide references?
Pro tip: Recent success should be an important factor in your decision, McDermut said. Ask agents about their most recent purchase. "If they were all more than year ago, keep looking," she said. Markets change over the course of a year, she said.
Negotiating the commission
Commissions for buyer's agents vary. Historically, home sellers often paid for the commission, typically 5% to 6% of the home's price.
But that changed with a recent federal lawsuit settled in 2024 against the National Association of Realtors. As a result, buyer's agents must enter into a signed agreement with buyers before showing a home, in person or virtually, according to the association. This is to promote transparency in the homebuying process, especially by telling buyers what they have to pay the agent and how much. Buyer's agents typically get a 2 to 3% commission.
A buyer doesn't need an agreement if they are just talking to an agent at an open house or asking them about their services.
A buyer will negotiate the terms of the services an agent will provide, how much they will be paid and how long the agreement lasts. Keep in mind that you and your agent can always mutually agree to change the terms of the agreement.
Despite the settlement, the vast majority of commissions are paid by the seller, said Thomas McCormack, senior partner and broker at Resources Real Estate in Rumson, New Jersey. Many times, a buyer will pull out of house hunting because they do not know if they can cover the costs, he said.
Typically, buyers will reduce their offers by the amount they have to budget for their agent's commission.
Reading the contract
A typical buyer's agreement is only a few pages. It will contain an explicit clause that the buyer will work exclusively with the agent. It also will state when the agreement expires and list the reasons for terminating it.
The agreement sets the duties the buyer and broker will perform. For buyers, these include providing financial information that shows they can purchase a home. For brokers, they include locating a property, helping the buyer purchase it and negotiating for the buyer.
The agreement will include a compensation clause as required by the National Association of Realtors settlement stating the amount of compensation using a dollar figure or a percentage of the price a buyer pays for a home. It also states that the seller can pay the compensation.
The agreement also must state that an agent is prohibited from getting compensation over the amount negotiated. The agreement must state that commissions and fees between the buyer and agent are negotiable.
It also must state that the agent does not perform certain services related to a purchase, such as providing legal advice, acting as a lender, advising the buyer on tax consequences of the purchase or serving as a home inspector.