Real Estate Deals – The Role Of A Buyer’s Agent

By Ciprian Morariu Published: March 18, 2024

Real Estate Role Of A Buyer’s Agent

Buying a house soon or planning to do so in the future? 

If you’re ready to make one of the most important financial and emotional decisions of your life, then it is important to get some things in order. 

Especially in today’s complex real estate market with so many choices and decisions to navigate, the need for skilled and knowledgeable buyer’s agents is more than ever. 

Buyer’s agents have a great role to play in real estate transactions. They are licensed professionals who help homebuyers navigate easily through the complete homebuying process. It is their responsibility to ensure that their clients get the best deals and value for money.  

Did you know that the top buyer’s agents can earn as much as $150K annually? 

If you are wondering how to become a buyers agent and what are the steps involved, then this article is for you. 

Keep on reading to find out the step-by-step path to becoming a certified buyer agent in the United States and put your career on a path to success. 

Introduction to Buyer’s Agent

Who is A Buyer’s Agent

It is best here to start with what is a buyer’s agent in real estate and is their role in real estate transactions. 

A licensed buyer’s agent is a real estate professional who helps clients close property deals and takes part in every aspect of the buying process. They represent home buyers who are looking for their next investment. 

Further, a buyer’s agent provides all relevant inputs to clients, thereby helping them make the best investment decisions.   

You will be helping buyers find homes, communicate interest with owners, and negotiate prices to get the best deals. 

Why Buyer’s Agents Are Crucial to Real Estate Transactions

Working with an agent is not mandatory for homebuyers, however, it is often recommended to do so because a good buyer’s agent is like having a strong weapon in your armor. 

Buyer’s agents make important buying decisions on your behalf and make sure that you make investment choices that are in your best interests. 

Given below are some of the functions of buyer’s agents. 

1. Provide guidance: As a homebuyer with many options and choices to make, you will need the help and assistance of an agent to make the right decision. 

Buyer’s agents guide how to choose the best home concerning must-haves and nice-to-have features and amenities. 

2. Find properties: As a buyer’s agent, your primary goal is to find and suggest the most suitable homes for sale for your clients. 

Finding the right property is one of the most crucial aspects of buying a home and this is where a buyer’s agent can come in handy with their knowledge of the local markets. 

Buyer’s agents are responsible for scouting through various databases and property listings to determine the most suitable and relevant homes for sale. 

3. Property tours: Once a client has finalized and shortlisted a few properties that match their expectations and criteria, they seek the assistance of a buyer’s agent to arrange property tours. 

Buyer’s agents are responsible for scheduling property showings and home inspections by coordinating with the homeowners and sellers. 

As buyers tour and inspect the property, the agent must answer any questions their clients may have regarding the property. 

4. Negotiate offers and deals: A buyer’s agent is trained in negotiation skills and hence can offer advice to clients that will help them get the most out of real estate deals. 

Due to their knowledge and experience in the market, buyer’s agents can make strategic bids to get the negotiation in the buyer’s favor.  

After a seller has responded, a buyer’s agent will further negotiate with the seller and help find the best deal for their client. They will advise the buyer on whether the price requires further negotiation or any amendment. 

5. Provide references: When you go out to purchase a home, you will need the services of a long list of real estate professionals. 

Some of these include - home appraisers, home inspectors, real estate attorneys, mortgage brokers, and home movers among others. 

Due to their extensive network, they can provide you with professional references for your specific needs. This way, buyers can experience the assurance of working with trustworthy individuals only. 

Now that we know the importance of the buyer's agent in a real estate transaction, let us move to understand how they are paid. 

Who Pays the Buyer’s Agent?

Understanding Agent Commission Structures

Many upcoming and aspiring buyer’s agents often face a common question - who pays the buyer’s agent and how exactly is their payment calculated?

As per the standard practice, a buyer’s agent works on a commission basis. 

They earn this commission after a real estate transaction is completed i.e. after a buyer has obtained ownership rights of their desired property. 

Typically, homeowners and sellers add an extra 3-4% to the selling price of their property which amounts to the average commission rate charged by the agent. 

Since a buyer’s agent is paid by their client, this means that in the end, the final commission amount is ultimately paid for by the buyer on behalf of themselves and the seller. 

How Seller’s Concessions Affect Buyer’s Agent Fees

As a common practice, sellers and buyers split the average commission fee of 4-6% of the final sale price of the property. 

Technically, both sellers and buyers pay for the agent’s commission, but as most sellers take the commission rate into the final selling price of their property, ultimately, the commission gets passed on to the buyer in the end. 

This is why a seller’s concessions can alter a buyer’s agent fee - it can have direct or indirect consequences on how much commission you can earn. 

For example - if a seller decides to factor the commission amount in the final selling price of a property, it could result in the buyer’s agent getting a smaller commission as some buyers might not want to end up paying a high agent fee. 

The Role of Agency Agreements

An agency agreement plays a pivotal role in a real estate transaction, especially when it comes to preserving and protecting the rights and interests of a seller and a buyer. 

An agency agreement is a legally binding contract document that covers all the important details related to a real estate transaction, such as: 

  • Details about the seller and buyer
  • Agents’ fees and commission 
  • Estimated listing and selling price of a property
  • Duration and period of agreement
  • Type of agency agreement

Whether you are a buyer or a seller’s agent, it is your responsibility to formulate an agency agreement and ensure that both parties have mutually agreed and signed the agreement. 

Without an agency agreement, the seller and the buyer will not have any legal protection to fall back on if any dispute arises or something goes wrong in the transaction. 

How Much Does a Buying Agent Make?

The Average Commission Rates for Buyer’s Agents

If you are considering a career as a buyer’s agent, an important question to answer is - how much does the buying agent make in a deal?

As per the industry, a buyer’s agent makes anywhere between 4 to 6 percent commission on the final selling price of a property. 

However, if you are looking at the nationwide average, a buyer’s agent makes around 2.66% on closing a deal. 

This means that if the national median home price sold for around $418 K in 2023, it would give a buyer’s agent around $11K in commissions. 

This commission cost is paid by the seller at the time of closing a deal. 

Factors Influencing a Buyer’s Agent’s Income

A buyer’s agent income is influenced by many factors, both internal and external. 

Internally, your annual salary and commissions are directly related to your knowledge and experience in the industry. Highly skilled and experienced agents tend to charge higher commissions.

Externally, the amount you earn in commissions can vary, depending on the location, type of property, and the selling price of the home.  

How to Become a Buyer’s Agent

Educational Requirements and Licenses

Now that you know about the role, responsibilities, and earning potential of working as a buyer’s agent in real estate, the next logical step is to figure out what is the way to start a career.

There are more than a million buyer’s agents today, and the market is surely expecting more skilled professionals to join the industry. 

But to become one, you will need to fulfill the basic eligibility criteria. Plus, you must also complete education and licensing requirements. 

While state-specific requirements may vary, here’s how to become a buyers agent by following the steps listed below: 

Step 1: Fulfill the basic eligibility requirements of being at least 18 years old and having a high school degree or diploma. 

Step 2: Complete the pre-licensing education: 

Completing the mandatory pre-licensing coursework is a must to gain knowledge about the real estate industry and prepare yourself for the licensing exam. 

Step 3: Apply for a license: 

Apply for a real estate license to the controlling body in the state after passing the licensing exam. 

Most states require you to have a minimum of work experience as a real estate agent, so you should keep that in consideration. 

Gaining Experience: From Novice to Expert

Between a buyer's agent vs real estate agent, many aspiring professionals often get confused. 

Note that these two are similar but separate career paths with their specific set of skills and responsibilities.