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Landmark Verdict Has Homebuyers Asking “Do I Need a Buyer’s Agent?"

Do homebuyers need a real estate agent?

For over 100 years, homebuyers have had a pretty sweet deal.

In 1913, the predecessor to the National Association of Realtors (NAR) instituted a rule saying that a home seller’s real estate agent must split their commission equally with the buyer’s agent.

This mandate means the home seller pays the buyer’s real estate agent, typically 3% of the home price.

A landmark verdict could change that. A jury in a Missouri case decided that NAR’s long-standing rule limits competition and should be abolished. It may have paved the way -- nationwide -- for sellers to opt out of paying the buyer’s agent commissions.

According to the New York Times, the verdict is already prompting at least a few buyers to inquire about homes sans-REALTOR®.

Although there are plenty of court battles to come on the issue, first-time homebuyers should start accepting this possibility: pay for their own agent or forego using one at all.

Do Home Buyers Need a Real Estate Agent?

Technically, homebuyers never need to use an agent. They can go it alone if they have the required skills to complete the transaction. However, being your own buyer’s agent is harder than it first appears.

Up until now, there has been little reason not to use a buyer’s agent. After all, the seller is paying for it.

Except in rare cases when one family member sells a home to another with no agents involved, a buyer’s agent is a fantastic idea.

So, faced with paying for one themselves, should buyers use an agent in this potentially new world of real estate? Let’s take a look.

How Buyer’s Agents Help

In today’s world, finding a home is easy. But the ins and outs of buying it are incredibly complex.

Even removing the mortgage process, buying a particular home is a tough decision full of ambiguity. A good agent removes much of that gray area and often makes the decision black and white.


A buyer’s agent represents the buyer’s interests. The seller’s agent is only concerned with the seller’s interests. A buyer with no agent is 100% responsible for negotiation, drafting a fair contract, and knowing the steps to complete the transaction. Most seller’s agents will simply out-skill even experienced buyers.

Contract drafting

When you make an offer on a home, you’ll notice that the contract is at least 20 pages long. Why? Some parts are there to comply with state and local law, other parts are to protect you during the transaction.

Most buyers would not know how to put together a solid purchase contract on their own.

For example, a financing contingency gives the buyer an “out” if financing falls through. An inspection contingency protects the buyer from buying a home in need of expensive repairs.

The purchase contract is one of the most important pieces of perhaps the biggest purchase of someone's life.


Ask any real estate agent and they’ll tell you they learn something new on every transaction, and no two homes are alike.

An agent brings context to the issues that buyers will undoubtedly face.

For instance, what are the risks of buying a home with a septic system or well? Will a greenbelt behind the house eventually be full of homes? Does it matter if that structure in the backyard is to code?


A good buyer’s agent can pay for themselves. For example, the buyer’s agent knows the local market is soft and advises an offer of $5,000 below asking price.

In addition, she negotiates $7,500 in closing costs in lieu of repairing inspection items. The seller’s agent accepts both requests.

Most first-time and even repeat buyers haven’t honed their negotiation skills or have the real estate knowledge to leverage situations to their advantage.

Local knowledge

A good real estate agent knows when a new employer is moving to town or when a city is planning a downtown revitalization project.

They are on local boards and know city council members personally. An agent breathes and sleeps local real estate, which is nearly impossible for someone with a day job and all of life’s other responsibilities.

Getting an accepted offer

Many sellers and seller’s agents won’t entertain offers from self-represented buyers, and that may be the case in the future, too. It’s about more than commissions.

Agents know that the transaction will be smoother and carry lower risk of unraveling when the buyer works with an agent. The seller’s main goal is usually to close as quickly as possible. There’s a big risk of a sale falling through when a new buyer has no agent.

Disadvantages of a Buyer’s Agent

Buyer’s agents are often worth every penny, no matter who pays. But there are drawbacks to using them, too.


In theory, the buyer’s agent adds 3% to the home’s sale price. However, it’s unlikely that home prices will drop by 3% if sellers stop paying for the buyer’s agent.

It’s hard to predict how much a buyer’s agent would cost under a self-pay system. But most agents who are used to working for 3% of the home’s price will probably not settle for $500. Cost will be the top disadvantage to using a buyer’s agent if rules change as expected.

Free access to home listings

Most buyers don’t need much help finding homes. In pre-internet days, a buyer’s agent shared and showed suitable homes. They alone had access to the Multiple Lising Service (MLS). Those days are gone.

That being said, only an agent can get the inside scoop on a home directly from the seller’s agent. It’s what’s not on the listing information that’s important, such as the seller’s timeline or why the previous buyer backed out.

Some agents don’t add value

Some agents haven’t been in the business long enough to clearly guide buyers through a transaction. Others want to close the transaction even if it’s not in the best interests of the buyer.

Home buyers should ask for recommendations and interview agents no matter who is paying for them.

So, Can I Buy Without an Agent?

Homebuyers can and will purchase without agents if commission rules change.

Some will do it to save money. But for many, it will be out of pure necessity.

Most first-time buyers have just enough for a down payment and closing costs. Unless new mortgage options arise to finance agent commissions, many buyers will be forced to go it alone.

Complex decisions about real estate and even legal issues could fall on the mortgage professional or even family and friends who have purchased one or two homes.

Unfortunately, first-time buyers may end up paying the price even if they don’t use an agent. Many buyers will lose their earnest money, pay too much, or buy a home that’s more trouble than enjoyment. Yet, some could come out ahead.

Only one thing is nearly certain: homebuyers should prepare now for the possibility of paying for their own agent in the near future.

About The Author:

Tim Lucas spent 11 years in the mortgage industry and now leverages that real-world knowledge to give consumers reliable, actionable advice. Tim has been featured in national publications such as Time, U.S. News, MSN, The Mortgage Reports, My Mortgage Insider, and more.

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