Buyers Real Estate Agent - Why Do I Need One?

What exactly is a real estate buyers agent and is it true they can save me thousands of dollars? As buyers we have been taught that we can look freely in the market and when we find what we want at the price we are willing to pay, we can purchase it. We know that all sales people represent the sellers of the goods and we understand this concept. So why would I as a buyer sign a contract with a exclusive buyers agent that says I will only buy a piece of real estate through this one specific agent? What if the agent doesn't find what I need or want? What if the agent fails to serve my needs? What if I want to see a property without my agent? Why would I want to limit myself to just one agent? Why would I want to obligate myself to pay a buyers agent commission? To help us understand better, let's look at a historical real estate transaction. The first thing to understand about real estate is that historically real estate agents have represented the sellers and not the buyers in the typical transaction. If you wanted to buy a house you'd go out and look at open houses by yourself or just drive by the model homes in a new sub division. The sales agent that greets you is working for the seller of the home to secure a buyer at the highest and best price possible. Agent Karl will be nice to you and always appear to be looking out for your best interests because he wants to secure you as a buyer for his seller. But, because agent Karl is nice and appears to be interested in helping you, do may think it's alright to tell him personal information. Suppose you tell him that you love the house and you have the down payment and closing costs in your savings account. And you would like the seller to contribute $5000 towards the closing costs so you can do some additional landscaping and agent Karl writes the offer up including your request. That was simple, you didn't need a buyers agent agreement, right? When agent Karl meets with his seller to present your offer, by law he must tell his seller everything he knows about you. Agent Karl explains everything in your offer to his seller, but he also tells them that you love the house and probably would purchase the house even if they do not contribute the $5000. So now agent Karl presents you with the sellers counter offer, which does not include the $5000 you asked for. Agent Karl apologizes because he was just not able to get you what you wanted. He explains that the home is still a wonderful deal and it would be a shame if you passed it up, so you decide to sign the agreement. How would having a buyers agent changed things? If you had a buyers agreement, he would have helped you save the $5000, plus he could have negotiated to save you in other areas like inspection reports and home warranties. He would have warned you about revealing information to outsiders and in the above example would have written the offer and presented it to agent Karl and sold them on you and your offer. You also did not know that agent Karl's agreement with the seller included a provision to pay for a buyers agent commission so you could have had a buyers agent represent you for free. But instead you chose to work with agent Karl who now received both the sellers side and buyers side of the commission and you lost $5000 in the transaction.