How to Find a Low Cost Buyer’s Agent

The modern real estate world has undergone a massive shift in how business is handled. 

With the recent court settlements surrounding the National Association of Realtors (NAR) finally in full effect, many home buyers will likely have to navigate some confusion about what has changed and how it will affect the home-buying process. 

The most essential item every buyer should know is how commissions work. 

As of August 17, 2024, new NAR guidelines went into effect, and NAR-affiliated Multiple Listing Services (MLS) are prohibited from allowing owners to input buyer’s agent commission details on listings. This is intended for a more transparent and flexible negotiation process between home sellers, buyers, and their agents, to determine commission structure for each transaction.

In light of these changes, buyers who choose to purchase a home with the help of an expert buyer’s agent may find themselves in a scenario where they might have to pay their agent’s commission out of pocket, in the event that a seller isn’t offering to pay for the compensation for a buyer’s agent.

Don’t let that news put you into panic mode just yet – many sellers may still continue to offer compensation to a buyer’s broker. But if they don’t, you’ll want to know how you can leverage the services of a low-cost buyer’s agent so you can still have representation without breaking the bank.

How to find a low-cost buyer’s agent

• Understand buyer’s agent commission
• What to look for in a low-cost buyer’s agent
• Use online real estate platforms
• Negotiate commission rates
• Consider flat-fee agents
• Work with brokerages that offer rebates
• Use referrals and check reviews
• Compare local vs. national low cost brokerages
• DIY home buying vs. expert representation 

Understand buyer’s agent commission

Before worrying about potentially paying a buyer’s agent commission, you have to understand what the fee is actually for. 

An expert buyer’s agent does all the heavy lifting of homebuying, so you don’t have to. Your agent will understand your needs and preferences, guide you to the areas and properties that best suit your budget and tastes, handle negotiations and complicated paperwork, and ultimately secure the best possible deal for you. 

A buyer’s agent commission compensates an agent's effort and skill in helping execute those responsibilities. The amount of that fee depends on many factors.

In many cases, a seller may offer to pay the buyer’s agent commission as an incentive to attract a larger pool of buyers. When this offer isn’t on the table, there may be a possibility that you have to pay your buyer’s agent out of pocket. 

Traditional brokerages may charge a buyer’s agent commission of up to 3%. Some may offer cost concessions by providing less services. While other brokerages utilize digital tools and a streamlined homebuying process to offer a full-service experience at a more competitive rate.

As a buyer, you will need to interview and discover brokerages that can offer the services you need at a price that best suits your budget. There are various alternatives to traditional brokerages.

What to look for in a low-cost buyer’s agent

This must be clear from the start: finding a low-cost buyer’s agent doesn’t mean compromising on quality of service. 

There are plenty of skilled agents out there who offer excellent service at a more approachable cost. The trick is knowing what to look for. 

Start by focusing on agents with a strong track record in your local market. Experience is crucial because a seasoned agent will have a deep understanding of the market dynamics, property values, and negotiation strategies that can save you money in the long run.

Another critical factor is communication. Even if you opt for a lower-cost agent, you still want someone responsive and available when you need them. Buying a home is a significant financial decision, and you want an agent there to guide you every step of the way. Ask potential agents about their availability, preferred communication methods, and how they handle the fast-paced nature of real estate transactions.

Lastly, transparency is key. Ensure the agent you choose is upfront about their fees, services, and what you can expect throughout the process. A low-cost agent should not mean hidden fees or unexpected charges..

The best way to ensure that transparency is carefully reviewing the buyer representation agreement. The form should outline in detail how your agent’s compensation will be handled, whether it’s potentially covered by the seller, or how much you will have to pay out of pocket if the seller does not offer to pay a buyer’s agent. 

Always be sure to take the time necessary to review the agreement and ask about any clauses or terms you aren’t sure about.

Use online real estate platforms

Online real estate platforms have emerged as game-changers, offering low-cost buyer’s agent services that leverage technology to reduce costs.

These platforms often automate many of the administrative tasks that traditionally required manual effort, allowing agents to focus on what they do best: helping you find and buy your dream home.

For example, Prevu gives access to a digital home buying platform that allows buyers to connect with an expert buyer's agent immediately and schedule property tours with the click of a button. 

Brokerages that utilize such platforms can offer lower commission rates or even rebates to buyers by reducing the time and resources required to manage a transaction. This approach not only saves money but also empowers you with more control over your home search.

However, ensuring that these tech-driven solutions still offer the personal touch you need is important. 

While online platforms can make the process more efficient, having access to a knowledgeable agent who can answer your questions, negotiate on your behalf, and provide insights into the local market is invaluable. When exploring online platforms, look for those that balance technology with expert human support to ensure you get the best of both worlds.

Negotiate commission rates

There is one golden rule all buyers should remember before hiring representation: commission rates are always negotiable. 

However, it’s crucial to approach the negotiation with a clear understanding of the typical rates in your area, your budget, and what you’re willing to pay. 

It’s also helpful to highlight your readiness to buy, as agents may be more willing to lower their rates if they see you as a serious and motivated buyer. Remember, negotiation isn’t just about lowering costs—it’s about finding a rate that both you and the agent are comfortable with, ensuring a positive working relationship.

While it’s fair to ask for a lower rate, it’s essential to remember that real estate brokers are professionals who deserve fair compensation for their expertise and hard work. Approach the negotiation respectfully and be open to compromise. A good agent will appreciate your directness and may be more willing to work with you on a commission rate that benefits both parties.

Consider flat-fee commission real estate agents

Instead of charging a percentage of the sale price, flat-fee agents charge a set amount for their services, regardless of the home’s value. This model can be particularly appealing if you’re purchasing a higher-priced property, as the fee remains constant, potentially saving you thousands of dollars.

However, it’s crucial to understand what’s included with a flat fee company. Some flat-fee agents may offer a more limited range of services than their commission-based counterparts. For example, they might provide essential services like listing searches and offer preparation but leave out more personalized support, such as in-depth market analysis of home prices, or extensive property showings vs open houses.

When considering a flat-fee agent, ask detailed questions about what services are included and whether there are additional costs. A flat fee MLS company doesn’t have to be a discount real estate company.

It’s also worth comparing the flat fee to the commission you would pay with a traditional agent to determine which option offers the best value for your situation. Flat-fee agents can be a great choice if you’re confident in your ability to handle some aspects of the process independently, but they may not be the right fit if you’re looking for a full-service experience.

Work with brokerages that offer rebates

When a seller is willing to pay the buyer’s agent commission, leveraging a commission rebate can be an unparalleled way to generate savings and create affordability.

A commission rebate is a portion of a buyer’s agent commission fee returned to the buyer after closing on a home. Brokerages like Prevu Real Estate specialize in rebates by investing in digital homebuying tools that help streamline the real estate transaction process and potentially unlock significant savings for buyers. 

Buyers who work with Prevu can take advantage of the firm’s Smart Buyer Rebate to receive up to 1% of a home’s final purchase price after closing on a home, provided that the seller offers to pay a buyer’s agent’s commission.

These savings can be invaluable in helping to offset expensive closing costs or to jumpstart a furnishing budget for your new home. As you explore low-cost agents, be sure to ask if they offer rebates so you can leverage this tool in the appropriate scenario.

Use referrals and check reviews

Word of mouth will never go out of fashion when it comes to finding services, be it a trusty plumber or a real estate agent that got your friend their dream home. 

Don’t feel limited to doing all the work yourself; reach out to friends, family, and acquaintances to see if they can suggest buyers agents who offered them a service they were happy with. While lowering costs is important, an essential first step is to interview brokers who have a good track record and offer the expertise you need.

Feel free to ask potential agents for references and reviews, as well. Explore Google reviews for potential brokerages and look for those that have detailed descriptions of past buyers’ experiences. The more detailed reviews you find, the more telling it will be that it was worth the buyers’ efforts to write a thorough review of what they liked. 

Finding well-reviewed brokerages is an excellent first step to negotiating a commission rate that works for both parties or a low-cost agency that fits the bill immediately.

Compare local vs. national low cost brokerages

When searching for a low-cost buyer’s agent, you may have to decide between working with a local agent or a national discount agency. Both options have their merits, but they cater to different needs and preferences, so weighing the pros and cons of each is essential to determine the best fit for your situation.

Local agents bring a wealth of knowledge about the specific market you’re interested in. 

They’re familiar with neighborhood trends, school districts, and local amenities, giving you a deeper understanding of the area you’re considering. Local agents also often have strong networks with other real estate professionals, such as inspectors, appraisers, and contractors, which can be invaluable during home buying. Additionally, their availability for in-person meetings and showings can be a significant advantage, especially if you prefer a more hands-on approach.

On the other hand, national discount agencies operate on a broader scale and often offer lower fees due to their larger operations and reliance on technology. 

These agencies typically streamline the buying process through digital tools, allowing them to handle more clients at a reduced cost. While you might save money with a national agency, the trade-off is that you may not receive the same personalized service or local expertise.

DIY home buying vs. expert representation

For budget-conscious buyers, the idea of taking a DIY approach to home buying—skipping the agent entirely—might seem appealing. By handling everything yourself, you may be able to avoid paying agent commissions altogether, potentially saving significant money. However, this approach comes with its own challenges and risks, making it essential to consider whether it’s the right choice for you.

DIY home buying requires a strong understanding of the real estate market, the ability to handle negotiations, and a keen eye for legal details. You’ll be responsible for finding properties, arranging showings, negotiating with homeowners and their seller’s agent, and managing all the paperwork. While this approach can be rewarding, it also demands a significant time investment and a steep learning curve. Without professional guidance, you might miss crucial details or make costly mistakes that could outweigh any savings.

Low-cost agents, on the other hand, offer a middle ground. They provide essential services like property searches, negotiations, and contract management at a reduced cost, giving you the support you need without the full price tag of a traditional agent. 

Interested in buying a home this year? Browse listings in your area and see how much you can potentially save with Prevu.