A buyer’s agent represents the buyer in a home purchase: finding and showing homes, advising on price, writing and negotiating the offer, and managing inspections, contingencies and escrow through closing. Their compensation is negotiable, not set by law, and is spelled out in a written buyer representation agreement signed before touring homes.
What does a buyer’s agent actually do?
A buyer’s agent works for you, not the seller, from the first search through the day you get the keys. The work usually falls into these stages:
- Search: learning what you need, setting up listing alerts and flagging homes that fit your budget and criteria.
- Showings: scheduling tours and pointing out things that affect value or future cost, such as condition, lot, location and HOA or special tax obligations.
- Pricing guidance: reviewing recent comparable sales so you can decide what a home is worth to you before you make an offer.
- Writing and negotiating offers: preparing the purchase contract, explaining its terms and negotiating price, credits, repairs and timing with the listing agent.
- Inspections and contingencies: helping you schedule inspections, review reports and disclosures, and keep track of contingency deadlines.
- Escrow: coordinating with the escrow officer, lender and title company so the paperwork and deadlines stay on track through closing.
The same steps apply whether you are looking at a tract home in Murrieta or a property on acreage in Temecula Wine Country, although the details to check can be very different.
How is a buyer’s agent paid?
A buyer’s agent is paid the compensation that you and the agent agree to in writing. There is no standard or legally required rate, and the amount and structure are fully negotiable.
There are two common ways the fee gets paid:
- The buyer pays it directly, typically at the close of escrow.
- The seller agrees to pay some or all of it as part of the negotiated deal, for example as a term in your purchase offer.
Whether a seller contributes depends on the property and the negotiation. It is not guaranteed, so it is worth understanding what you would owe if the seller pays nothing or only part.
What is a buyer representation agreement?
A buyer representation agreement is a written contract between you and your agent’s brokerage that sets out the services the agent will provide and how the agent will be compensated. Buyers now sign one before touring homes with an agent.
Read it the way you would read any contract. The key items to look for are:
- The amount or rate of compensation, stated clearly.
- How long the agreement lasts and what area or type of property it covers.
- Whether it is exclusive.
- How either side can end it.
If a term is unclear, ask about it before you sign. These terms can be negotiated.
Can the seller pay my agent’s fee?
Yes, a seller may agree to pay some or all of your agent’s compensation, but it is a negotiated term, not an automatic one. Your agent can ask the listing agent what the seller is willing to offer, and the request can be written into your offer along with price and other terms.
Because every part of an offer affects how a seller views it, talk with your agent about how a compensation request fits into your overall offer strategy. Also ask your lender how agent compensation is treated under your loan program.
What should I ask before hiring a buyer’s agent?
Ask direct questions about service, communication and cost before you sign anything. Useful questions include:
- What exactly will you do for me, from search through closing?
- What is your compensation, and what happens if the seller does not cover it?
- How long does the agreement run, and how can I cancel?
- How well do you know the specific areas I am considering, such as Temecula or nearby cities?
- How and how often will we communicate?
Frequently Asked Questions
Do I have to use a buyer’s agent to buy a home?
No. You can buy a home without your own agent. If you do, keep in mind that the listing agent was hired by the seller, and you will be responsible for handling pricing, contract terms, inspections and deadlines yourself.
Can the listing agent represent me too?
California allows one agent or brokerage to represent both buyer and seller, called dual agency, but only with disclosure to and consent from both sides. A dual agent cannot share one party’s confidential price position with the other. Many buyers prefer an agent who represents only them.
When does a buyer’s agent get paid?
In most purchases the agent’s compensation is paid through escrow when the sale closes. Your buyer representation agreement explains when compensation is earned and due, so read that section carefully.
Can I cancel a buyer representation agreement?
That depends on the cancellation terms written into your agreement. Ask about them before signing, and if the relationship is not working, talk to the agent or the agent’s broker about ending it.
Thinking About Buying in the Temecula Valley?
Aimee Ghafouri is a real estate agent based in Temecula who grew up in Murrieta and works with buyers, sellers and investors across the Temecula Valley and southwest Riverside County.
Aimee Ghafouri, 951 Properties, CAL DRE #02193341. This page is general information, not legal, tax or financial advice. Equal Housing Opportunity.
