14 min read

Real talk: buying a house can be intimidating. So we created the first-time homebuyer series to take the mystery and anxiety out of the house-hunting process. Dive into our complete guide which covers every step of the process: why you should buy a house, how to get pre-approved for a loan, how to find an agent, what to look for in a house, how to make an offer (and negotiate!), how an inspection works and how to close once you find the dream home.  Don’t worry we spell it all out for you so that if this is your first time (or third) you’ll have all of the information you need for a successful purchase right at your fingertips. Read the entire series here. 

So how do people even find their real estate agents? Are you just supposed to start Googling? Well, you could! You’d find a lot of information on a lot of agents in your area. But there are easier ways to find an agent you trust and work well with. A 2018 survey by Homes.com found that 40 percent of first-time homebuyers considered buying a house more stressful than a job interview or applying for college and described it as “the most stressful event in modern life.” 

Don’t you want to spend the most stressful time of your life with a real estate agent who knows what they’re doing? We’ll show you how! This guide will:

If you’d like to jump to a certain section of the guide, just click the links above.

Let’s get into it!

Insight from Real Homebuyers

Brian and Taylor Decker

This young couple recently worked with a real estate agent to buy their first home after years of apartment living. 

Bruce and Marie Johnson

This couple worked with a real estate agent for the first time to buy a townhouse after living in their first home for 40 years. 

What Does a Real Estate Agent Do For You?

It seems like a no-brainer that you’d use a real estate agent the first time you buy a house! But you’d be surprised about some of the misconceptions some people have about agents before they even sit down and have a discussion with them. 

What do our first-time homebuyers remember thinking about agents?

“Before we started the home buying process and before we had met our agent and decided who we were going to work with, I was actually on the fence about the whole REALTOR® thing,” said Brian Decker. “My preconceived idea was they’re there for commission and they’re just going to try to sell you the first house that they can because that’s how they get paid. But as we progressed, it became really evident that it wasn’t that way and I can’t imagine going through the process without one now.”

“I thought communication was going to be cut and dry- not a relationship at all,” said Taylor Decker. “So I was really happy to find out it was very relationship-based and they look out for your best interests. We will talk to our agent very often.”

Our repeat buyers felt differently about real estate agents, even though they had never worked with one before. “My prior perceptions of REALTORS® were very positive. I didn’t have big expectations but I expected it all to go well,’ said Marie Johnson. 

A good real estate agent will spend time making your experience an excellent one. They’re focused on your goals and understand that buying a house is a big life event. A good agent will spend their time working with you, not trying to put you in the first house you find in order to make a commission. In fact, most buyer’s agents will get paid from the seller’s side, not yours! According to the National Association of REALTORs® (NAR), about 75 percent of home sellers in 2019 reported that they were the ones paying the agent’s commission- not the buyers. We’ll talk more about this when we address common misconceptions. 

So, other than helping you find a house, what exactly do you want a real estate agent do for you? NAR asks buyers this every year in the annual Home Buyers and Sellers Report

how to find a real estate agent
Photo courtesy of National Association of REALTORS® 2019 Annual Buyers and Sellers Report.
  • Finding the right home is top of the list with 51 percent of first-time buyers saying that’s the important service they need from an agent. Makes sense! 
  • Help with price negotiations is important to about 21 percent of first-time buyers. Do you feel comfortable negotiating the terms of the sale by yourself? Most buyers don’t, even 25 percent of repeat buyers want negotiation help from their agents! 
  • Help with paperwork is something you might not even be thinking about at this point in the process. But it’s a big one! There is so much paperwork to fill out that is complicated and full of legal terms. You’ll want a professional to help you make sense of everything.
  • Help figuring out how much house you can afford is something you may not think would be part of the agent’s job. After all, that’s part of your discussion with a lender! But 7 percent of first-time buyers wanted extra guidance. Your agent is an experienced professional who can show you houses that fit your purchasing power and will keep you within your budget.

What else should you expect from your relationship with your real estate agent? 

  • Constant communication. Your agent should always be in touch with you about new houses to look at, information from the sellers, updates in the negotiation process and so on. “I was expecting communication to be random and about the house,” said Brian. “But really we talked to our agent almost all the time throughout the entire process. It was daily or multiple times a day. The response time was great too, within minutes of getting a call from the seller’s agents, she had stuff prepped for us.” 
  • Honesty. Your agent should be honest with you about everything, whether it’s telling you a house won’t be the right one for you or giving you bad news about a deal falling through. A good agent will share the good, the bad and the ugly about finding your dream house.
  • Market knowledge. Your agent should be savvy about everything going on in the real estate market. Do they know what’s going in the housing market you want to be in? Do they know much about the neighborhoods you’re looking at? 
  • Sharp negotiation skills. Your agent should leverage their market knowledge and experience to get the best terms possible for you. That’s a big reason you hire them! 

How to Find a Real Estate Agent

The number one way most buyers (and sellers) find their real estate agents is through word of mouth. Has anyone in your family bought or sold lately? Have any coworkers bought or sold in the last couple of years or have any relatives who are agents? If you know anyone who is already working in real estate (and you don’t want to mix business and friendship), ask them to refer you to someone they know and like. Most people tend to go with an agent that’s already been vetted by someone they trust, like a relative or a friend.

According to the 2019 NAR Buyers and Sellers Report, the top five ways first-time buyers found their agents were:

  1. Referred by a friend, neighbor or relative (51%)
  2. Inquiry about a specific property online (8%)
  3. Referred by another agent/broker (6%)
  4. Online (5%)
  5. Visited an open house and met the agent (5%)
how to find a real estate agent
Photo courtesy of National Association of REALTORS® 2019 Annual Buyers and Sellers Report.

Referrals/Word of Mouth

Our first-time buyers can attest to the power of a good referral. “We found our agent because I worked really closely with a professor at Iowa State University and he was like my career advisor,” explained Taylor Decker. “His daughter had just bought a house and when he heard I was moving to Ankeny, he said we had to get in touch with her agent. 

“So the second we started thinking about buying a home, we knew exactly who to reach out to. We only reached out to one agent and it worked out perfectly for us.”

It’s not unusual to talk to just one agent before deciding to work with one. According to the NAR annual survey, about 69 percent of first-time buyers only interviewed one agent. It’s pretty easy to tell at your first meeting if you’re going to work well with an agent! 

But that doesn’t mean you can’t interview more. Take the time to meet as many real estate agents as you need to in order to find one you trust and work well with. It’s your right as the client to work with an agent who has your best interests at heart. 

Your network of friends and family is the best source of information on good real estate agents in your area. 

Online

Our repeat buyers found their agent when they were hunting for the perfect townhome online.

“We found our agent by accident. We saw the townhouse [we wanted] on Zillow and made a call and the agent contacted us,” said Marie.

Chances are good you’ve already started searching for homes online by the time you’re thinking about finding a real estate agent. That’s good- it gives you a great preliminary idea of what houses and prices look like in the areas you want to be in. You’ll find tons of agents’ names and pictures on each home you see listed on realty sites and search sites like Zillow or Realtor.com. We’ll talk about these sites further down!

Open Houses

You wouldn’t think buyers still find their agents through open houses but about 5 percent of first-time buyers did just that! You never know! An open house gives you the chance to have an informal conversation with an agent before you meet at his or her office. 

It’s important to note that if you find an agent and agree to work with them, you can keep going to open houses on your own! But you should let the agent hosting the open house know you already have an agent. 

What to Look for in a Real Estate Agent

As you’re looking for an agent, there are a few traits you will want to keep an eye out for. The 2019 NAR Buyers and Sellers Report asked first-time and repeat buyers what they considered an agent’s most important skills and qualities to be and they’re a pretty good tool to use for evaluating the agents you interview.

Photo courtesy of National Association of REALTORS® 2019 Annual Buyers and Sellers Report.
  • The number one trait to look for in a real estate agent? Honesty and integrity. Buying a house is complicated, expensive and stressful (hey, we’re being honest). You need an agent that will be honest and forthright with you every step of the way- and 97 percent of first-time buyers agree.
  • Knowledge of the purchase process is invaluable for 95 percent of first-time buyers. You want an expert who knows the ins and outs of the process and can guide you through every step.
  • Responsiveness is key. Things move fast and situations change quickly in real estate. Houses can sell in a day so you need an agent who moves fast and keeps you updated. Ninety-four percent of first-time buyers rated this as very important to have in an agent.
  • Knowledge of the real estate market is crucial for 90 percent of first-time buyers. You need a savvy agent who can tell you what to expect in the housing markets you’re looking to buy in. 
  • Communication skills are essential and 89 percent of first-time buyers agree. There should be no guessing, no confusion and no uncertainty when it comes to buying a house. A good agent will clearly and quickly communicate with you every step of the way. “It really helps to keep the lines of communication open,” stated Marie. “Especially initially,” added Bruce. “To have the agent make sure that you are aware of what the process will entail was very helpful to us. You know what to expect and when to expect it so when it comes, it’s no major surprise.”

Referrals are such a strong method for finding an agent because trusted sources, your family members and good friends, can personally vouch for the traits and skills listed above. If you don’t find an agent through word of mouth, make sure you’re asking questions and getting to know the agent so you can determine if he or she will do the best job for you. 

Questions to Ask Your Real Estate Agent

When you’ve found an agent you’re interested in working with, you’ll contact him or her to set up a meeting. Most agents respond quickly to queries and will be excited to set up a sit-down meeting with you. You’ll most likely meet the agent either at his or her office or in a casual public setting, like a coffee shop. Either is fine, but you might find yourself more relaxed in a casual setting. 

For safety reasons, your agent may also want to meet in a public space and may ask that you show a form of I.D. to verify you are who you say you are. Agents have to think about their safety too! 

Do your research before the meeting. Every agent has a business page on social media and likely a website. Check out their pages for more information on how the agent does business, what kind of clients and listings they usually work with and how they present themselves. You may find yourself getting to know the agent before you even meet him or her.  

What should you talk to your agent about during your first meeting? A little bit of everything! You should also feel comfortable asking your agents more personal questions to get to know them as a business partner.

  • What’s your availability? We just talked about how important communication and responsiveness are in an agent. Ask this question so you can talk about communication preferences (call, text, email, etc.) and find out when your agent will be available.
  • How long does it take to buy a house? There is no hard and fast rule for how long it takes to find and buy a house. But your agent can give you an estimation. On average, you’ll probably look at at least 8-10 houses before you find one you want to make an offer on. But when you find one, you’ll have to move fast to make an offer because houses can sell the day they are listed. After that, it can take almost two months for the offer and negotiation process and around a month and a half to actually close on the house. Your agent will share all of this with you. 
  • What does housing look like in the areas I want to be in? If you know you’re dead set on moving into a specific neighborhood or area of town, your agent can tell you what the market is doing and what you’ll find available. 
  • What is your commission and how is it paid? This is a question that a lot of buyers either don’t think to ask or don’t feel comfortable asking. But you should! It’s not embarrassing or rude to ask how the agent will be paid- especially when many people think agents are only there for commission. Your agent will most likely tell you they’ll get paid by the sellers once you close on the house and that commission rate is negotiable.
  • Tell me more about you- what are your interests, hobbies, background? Why would you ask your agent this? You’re getting to know them as a person! You’ll be working in a close partnership with this person and you’ll benefit by learning more about their outside interests and life.
  • Do you work solo or on a team? If on a team, will I be working with your partner or assistant as well? Some agents have assistants to help out with showings and the paperwork. Some agents work in tandem with other agents to help clients. Find out how your agent works and who else you should meet on their team.
  • How long have you been an agent? Is your agent brand new to the world of real estate or a seasoned veteran who can show a house with both hands tied behind their back? You’ll want to know!
  • How much experience do you have working with first-time buyers? Agents who often work with first-time buyers can anticipate many of your needs, questions and anxieties.

You’re building a partnership with your agent so it makes sense you get to know them on a more personal level. 

Information Your Agent Will Share With You

Your agent will also ask you questions during this meeting. Be prepared to talk about your budget, what your needs are for a home (number of bedrooms, bathrooms, garage size, finished basement, etc.), your timeline (do you have to be out of a rental by a certain time?) and anything else your agent will need to know in order to start finding the right house. If you’ve already started looking at homes online, that’s fine! You can show your agent what you like and dislike so they have a frame of reference. 

Your agent will also take this time to explain earnest money to you. Earnest money is a good-faith “deposit” you include with any offer you put in on a house. Earnest money is typically anywhere from 1-5 percent of the purchase price and is held in an escrow account until you close on the house when it is then applied to your closing costs. You’re essentially showing the sellers you do intend to buy the house and have the money to back it up. Your agent will tell you to have that money available during your home search. 

A good agent will also prep you for the emotional aspects of buying a house. Truthfully, it can be a rollercoaster. You’ll be stressed, excited, anxious, apprehensive and worried you won’t find the dream home. Your agent knows this and should be prepared to be a source of support for you.

7 Common Misconceptions About Real Estate Agents

There are a lot of myths and misconceptions about what real estate agents can do for you, how long you have to work with them and how accurate third-party sites like Zillow can be. Let’s address the seven most common real estate myths so you can be informed and prepared before you meet with an agent.

1. Zillow is accurate.

We’re not here to tell you that everything you see on Zillow is wrong or misrepresents homes. Zillow (and other third-party sites) can be a really good tool for exploring home styles you’re interested in and getting a general idea of what’s available in the neighborhoods you want to buy in. It’s a good starting point!

However, the ‘Zestimate’ you see listed- estimates of the monthly mortgage payments, taxes and home insurance- are just that, estimates. Zillow is giving you a guess based on market numbers and an assumption you’ll put down a 20 percent downpayment. You can adjust those numbers in their calculator to change the interest rate, downpayment percentage and mortgage terms but it’s still just a guess. Don’t assume any of those numbers accurately reflect what your monthly payments will be. Sometimes the selling price the house is listed for is also an estimate!

Zillow is not always accurate when it comes to listing homes at auction or in foreclosure. Sometimes, homes will be listed as available through foreclosure when the bank hasn’t even officially made that designation. That means that the house isn’t even on the market and Zillow has it listed as available for sale. There are also homes for sale that may not be posted on Zillow. The homes shown on the site come from feeds from other sites, like multiple listing services (MLS). 

An MLS is a listing platform that only REALTORS® in a certain area have access to. Your agent will have access to your area’s MLS and will have the most up-to-date information on listings and knowledge of homes coming up for sale soon that won’t be on Zillow.  

Did you know real estate agents pay to have their information listed on Zillow? The listing agent actually responsible for selling a specific home may not be who you see on the site. Remember our homebuyer, Marie Johnson? She called the agent on the Zillow listing for her townhome and was connected with a completely different agent. 

At the end of the day, Zillow is a great research tool but your agent and lender are the ones who can give you accurate information on the house, market and mortgage.

2. The agent at an open house is the listing agent. 

Say you’re still trying to find an agent and pop into an open house. The agent hosting the open house may not be the listing agent trying to sell it. If an agent can’t attend an open house, they’ll ask someone from their agency to help out. Don’t assume the person working the event is the one with knowledge of the house!

That said, if the agent hosting the open house is not the listing agent, it may be a good opportunity for you to find out more about them and possibly work with him or her.

3. You sign a contract with your agent and can’t use any other agent. 

Your relationship with your agent can be formalized by an agreement to work together. Sometimes this is a verbal agreement to work together and sometimes your agent will ask you to sign a buyer’s agency agreement (also called a buyer’s exclusive agreement). This essentially states that you agree to become that agent’s client and the agent will collect a commission. This benefits both you and your agent: your agent is promising to make you a priority as a dedicated client and your agent will receive compensation for their hard work. 

However, not every agent will ask you to do this. In fact, according to the 2019 NAR Buyers and Sellers Report, only 34 percent of first-time buyers signed a written buyer’s agency agreement. Twenty-one percent of first-time buyers worked with their agents through a verbal agreement and 25 percent did not have a formal agreement of any kind. 

These contracts, while technically legal documents, are not iron-clad. If after working with your agent, you don’t find the relationship to be productive or the two of you don’t work well together, you can ask to be released from your agreement and find another agent. It’s not uncommon and you are entitled to work with an agent you like and trust. 

4. You should use the listing agent. 

Say you’re at an open house and the agent working it actually is the listing agent trying to sell the house. Sometimes new buyers think they should just keep it simple and work directly with the agent selling the house. An agent who represents both parties (buyers and sellers) is called a dual agent. A buyer’s agent solely represents the buyer (you) per the buyer’s exclusive agreement you enter into with your agent.

There’s nothing technically wrong with using the listing agent as a dual agent, but you won’t be working with someone who is undoubtedly putting your best interests at the forefront. Why? A dual agent has to balance your needs with those of the seller’s, which means finding a middle ground. If you use a buyer’s agent, you have someone solidly in your corner who is negotiating for your best interests.

5. You don’t need a real estate agent if you’re buying a house directly from the owners.

Sometimes you’ll encounter homes that are for sale by the owner. These tend to be older folks who have bought and sold a few times and are comfortable just going through their lawyer to sell their current home, rather than a listing agent. You may think, ‘Hey, that’s simple! I’ll just reach out to them directly and we’ll keep it easy.’

Not a great idea! It may seem appealing to cut out the middlemen and deal directly with the owners of the house. But as a first-time homebuyer, you’re at a disadvantage when it comes to evaluating the house, negotiating the price, navigating the paperwork and dealing with anything that might go wrong. 

If you have a real estate agent and you find a house that’s for sale by the owner, call your agent. They’ll still schedule showings for you, negotiate with the sellers and help you with everything. You’re looking out for your own interests by using your agent.  

6. You will pay your agent’s commission. 

We mentioned this earlier but it’s worth going more into detail about a real estate agent gets paid. Once you agree to work with your agent (verbally or through a written agreement) they become a buyer’s agent. Typically, a buyer’s agent is paid from the seller’s side as part of the cost of selling a home. The 2019 NAR Buyers and Sellers Report showed that 55 percent of the time the buyer’s agent was compensated by the sellers with only 21 percent being compensated from the buyer’s side. 

You typically will not pay your agent’s commission when you buy a house.

7. Agents will only show you houses listed by their agency. 

Your agent will not limit you to houses that are listed by other agent’s in their brokerage. In fact, they’ll use their networks and the MLS to find you homes in the areas you want to live in- regardless of who is listing them. 

Remember the MLS we just mentioned? Your agent will use that to find houses that fit your needs and budget. You’ll find that experienced agents all know each other, no matter what company they work for. Your agent will have no problem negotiating and working with a listing agent outside of their own company. 

The Benefits of Working with a Real Estate Agent

Finding a good real estate agent to work with all but guarantees you’ll find the perfect home within your budget. An agent’s experience, knowledge and support can be invaluable during an exciting (and stressful!) time. 

The 2019 NAR Buyers and Sellers Report asked buyers what they found most beneficial about working with an agent once they had finished the buying process. Unsurprisingly, 82 percent of first-time buyers found it most helpful that their agents helped them understand the process. Buying a house is complicated! You’ll need all the professional assistance you can get. Remember our repeat buyers, Marie and Bruce, also found that preparation from their agent helpful. 

Following that, 62 percent of first-time buyers found it helpful that the agent pointed out unnoticed features and flaws in the houses they looked at and 54 percent said their agent negotiated better terms of sale

Photo courtesy of National Association of REALTORS® 2019 Annual Buyers and Sellers Report.

What did our first-time homebuyers, Brian and Taylor, find most beneficial about working with an agent? “Just having that extra help, especially during the negotiation process, and pointing out different aspects when we were looking at different houses. She did a great job getting us [a house] that was a good fit,” said Brian. 

“As first-time buyers, we didn’t really know what things we would need,” said Taylor. “Having her to point us in the right direction when we didn’t really know what the difference would be or if we needed it was really helpful.”

Even our repeat buyers, Bruce and Marie, were grateful for the help and support their agent provided when they hit some snags with their bank while selling their old home and closing on their new townhome. “That’s when we realized that everything it cost us to go through an agency is worth every penny,” said Marie. “She knew what she was doing, she knew the area and she knew the market.”

“It was an eye-opener. The commission was worth it,” said Bruce.

Buying a house is exciting and stressful, all at the same time. It’s a momentous moment in your life that takes time and know-how to do right. Find an agent who understands your needs, your budget and has the knowledge and experience to prepare you for the process and guide you through it. Your relationship with your agent should be just that- relational rather than you feeling like one of many customers.

Once you’ve found a real estate agent you love, it’s time to start searching for the perfect house! 

first-time homebuyers

Real talk: buying a house can be intimidating. So we created the first-time homebuyer series to take the mystery and anxiety out of the house-hunting process. Dive into our complete guide which covers every step of the process so you’ll have all of the information you need for a successful purchase right at your fingertips.

Pin It on Pinterest

Share This