What is a Buyer's Agent?
Every real estate transaction has two parties - the seller and the buyer. While some homeowners elect to sell their property themselves without the expertise of a licensed real estate firm, most do use the services of a realtor.
The Seller's Agent
The seller is represented by the real estate agency that listed the property. A seller's agent WORKS ONLY FOR THE SELLER and has legal obligations, called fiduciary duties, to the seller. These include reasonable care, undivided loyalty, confidentiality, and full disclosure. Seller's agents often work with buyers, but they do not represent the buyers.
The Buyer's Agent
A buyer's agent WORKS ONLY FOR THE BUYER. A buyer's agent has fiduciary duties to the buyer which include reasonable care, undivided loyalty, confidentiality, and full disclosure. A buyer's agent has no loyalty to the seller, but instead is trying to find the best property at the best price for the buyer.
A Classic Example
Let's put all this into perspective, using a fictitious "John Doe Realty" as an example. Suppose you are driving around and you spot a home with a "John Doe Realty" sign in the front yard. Your immediate reaction is probably to call John Doe Realty and set up an appointment to have a John Doe Realty agent show you the property. But remember, John Doe Realty only represents the seller and he is trying to get the seller the best possible price. You are not John Doe Realty's CLIENT, you are their CUSTOMER. Anything you tell the agent may be passed on to the seller. Now let's suppose John Doe Realty showed you the house and you decided to bid, say, $220,000, but you told the agent, "I'll start there, but I'll go as high as $235,000". Despite your rapport and comfort with the agent, John Doe Realty is obliged to tell the seller, "The buyer will go as high as $235,000." You just lost your competitive edge in the bidding.
There's a better way
Let's back up. Using the same scenario, but this time after seeing the John Doe Realty sign in the front yard, you call Jewell Real Estate Agency (or for that matter, any agency other than John Doe Realty) to show you the home. Now you have a buyer's agent who represents you and your best interests. You are now the CLIENT, not just a customer. Your buyer's agent will work hard to find you the home that best suits your needs at the best possible price. And any information you give your buyer's agent, such as "I'll bid $120,000, but go as high as $135,000" is confidential. That fact will not be revealed to John Doe Realty, so you maintain your bidding advantage.
All this, and it costs you nothing
And the beauty of a buyer's agent is that the seller is still going to pay the commissions on the sale. Jewell Real Estate Agency (again, or any other agency) receives its commission from the seller at closing. So you got a buyer's agent to represent you, and it didn't cost you a cent. That's value.