Do You Need a Real Estate Agent to Buy a Home?

What Is a Real Estate Agent and Do You Need One to Buy a Home?

Buying a home is the largest financial transaction most people ever make, and the question of whether to use a real estate agent is more relevant than ever. After the 2024 NAR settlement changed how agent commissions work, buyers have more choices -- and more confusion -- about representation.

What a Buyer's Agent Actually Does

A buyer's agent represents your interests throughout the home purchase. Their job goes well beyond opening doors for showings. Here is what a good agent handles:

• Market analysis. Identifying neighborhoods that match your criteria and budget, pulling comparable sales data, and advising whether a listing is priced fairly.
• Property search. Accessing MLS listings, pocket listings, and coming-soon properties you might not find on Zillow or Redfin.
• Showings and evaluation. Pointing out issues you might miss -- deferred maintenance, layout problems, neighborhood factors that affect resale.
• Offer strategy. Crafting competitive offers, advising on contingencies, and negotiating price, repairs, and terms.
• Transaction management. Coordinating inspections, appraisals, title work, and the dozens of deadlines between contract and closing.
• Problem solving. When the appraisal comes in low or the inspection reveals foundation cracks, your agent negotiates solutions.

How Agent Compensation Works Now

Before the 2024 NAR settlement, sellers typically paid both the listing agent and the buyer's agent commission (usually 5% to 6% total, split between agents). Buyers rarely paid their agent directly.

The new rules changed this. Sellers are no longer required to offer compensation to buyer's agents through the MLS. Buyers now need to sign a written agreement with their agent before touring homes, specifying what the agent will be paid and who pays it.

In practice, many sellers still offer buyer agent compensation because it attracts more buyers. But some do not, which means you might need to pay your agent directly or negotiate for the seller to cover it as part of the deal.

Typical buyer's agent compensation runs 2% to 3% of the purchase price. On a $400,000 home, that is $8,000 to $12,000. Some agents offer flat-fee or reduced-commission structures.

When a Buyer's Agent Is Worth It

For most buyers, especially first-timers, a good agent provides value that exceeds their cost. You benefit most from an agent when:

• You are unfamiliar with the local market
• You have never navigated a real estate transaction
• The market is competitive and offers need to stand out
• You are buying in a different city or state
• You want someone to negotiate on your behalf
• The property has complexities (estate sale, foreclosure, new construction)

A skilled negotiator can save you far more than their commission. Getting $15,000 off the price or $8,000 in seller-paid closing costs more than covers a 2.5% commission on a moderately priced home.

When You Might Skip the Agent

Some buyers choose to go unrepresented. This can work if:

• You are an experienced buyer who has done this before
• You are buying new construction directly from a builder
• You have a real estate background or work in the industry
• You are buying from a friend or family member in a straightforward deal
• You are comfortable handling contracts, negotiations, and transaction details yourself

Going without an agent does not automatically save you money. If the seller is offering buyer agent compensation, that money does not come back to you just because you are unrepresented -- it stays with the seller. You would need to negotiate a price reduction equal to the commission, which is not always possible.

How to Find a Good Agent

Not all agents are equal. The barrier to entry is low, and many agents are part-time or inexperienced. Here is how to find one worth working with:

• Ask for referrals from people who recently bought in your target area.
• Interview at least three agents. Ask about their experience, transaction volume, and knowledge of your target neighborhoods.
• Check their track record. How many buyers have they represented in the past year? Do they primarily work with buyers or sellers?
• Evaluate their communication style. Do they respond promptly? Do they explain things clearly? You will be working closely together for weeks or months.
• Read the buyer representation agreement carefully. Understand the compensation terms, the duration of the agreement, and how you can terminate it if things are not working out.

The Agent-Lender Relationship

Your agent and your lender work together throughout the transaction, but they serve different roles. The agent handles the property side; the lender handles the financing side. A good agent will want to see your pre-approval letter before showing you homes, so you are looking at properties you can actually afford.

Be cautious of agents who push you toward a specific lender without explanation. While referrals can be helpful, you should always compare rates and fees from multiple lenders independently.

SOMA helps you understand your financing options before you start working with an agent, so you enter the relationship informed and ready to make competitive offers.