Is a Buyer's Agent an Expense or an Investment? What Fort Wayne Buyers Should Know
Buying a Home · From Moving Fort Wayne
Is a Buyer's Agent an Expense or an Investment? What Fort Wayne Buyers Should Know
In August 2024, real estate changed overnight. On this episode of Moving Fort Wayne, Brad Noll and Trevor Day of Noll Team Real Estate unpack buyer agency agreements and buyer representation, and answer a question many buyers are asking: is a buyer's agent an expense or an investment?
Brad compares the shift to name, image, and likeness in college sports. That world changed overnight, too. Brad, who is part of a mentor program at Purdue Fort Wayne, remembers when he could not even take a college athlete to lunch, and now those athletes can be paid. Real estate had a similar moment, and like every team that wanted to stay relevant, the Noll Team had to pivot.
One of the team's core values is "always repping," which Trevor explains as always representing the team's values, whether in public, on the team, or across the industry. That idea runs through the whole conversation.
What Changed for Buyers
Before buyer agency agreements, Trevor says, the team still did buyer consultations, but afterward buyers could see any home without signing anything. There was no written commitment to an agent or brokerage. The new process brings more transparency, and Trevor calls it a good thing, even though it pushed agents to clearly show their value.
Brad, who started in real estate in 2003, remembers a line almost every buyer's agent used: it's free to work with me. In hindsight, he says, that was not accurate. Buyers did not pay out of pocket, but the fee was included in the purchase price. He compares it to building a $400,000 home, where the roofer might charge the builder $20,000 and that cost is wrapped into the final price along with the painter, the flooring company, and the cabinet maker.
Brad explains that on March 15, 2024, the National Association of Realtors agreed to a settlement resolving class action claims about commission practices. Buyer's agent compensation is no longer posted on the MLS, so buyers need to understand how their agent gets paid and what that agent will do for them.
“One of my favorite things we say on the buyer consultation is we're not going to lie to you and we won't lie for you.”
Trevor Day
What a Buyer Agency Agreement Means
Today, Brad explains, a buyer working with an agent who participates in the MLS must have a written agreement with that agent before touring a home, in person or virtually. In the team's consultations, Trevor walks buyers through the agreement, including the fee, how it can be negotiated in the purchase agreement, and how the team represents them through the contract, inspection, and appraisal negotiations.
Trevor notes that many first-time buyers do not realize a listing agent represents the seller. Calling the listing agent with questions is allowed in Indiana, but having someone directly in your corner with your best interest in mind is different.
Not every buyer is ready for a long commitment, and that is okay. Trevor says the form is customizable. The team typically likes a six-month agreement, but it can be shorter, limited to a specific city, county, or part of the state, or even written for a single property. The team focuses on about an hour radius of Fort Wayne and refers buyers to agents in places like Indianapolis. Brad sums it up: buyers do not have to sign an agreement until they want representation.
How to Choose the Right Buyer's Agent
"You can't test drive your realtor," Brad says. But buyers can interview agents, and he and Trevor offer some practical ways to do it:
- Visit open houses and notice which agents you connect with and who adds value.
- Ask friends and family who they have worked with.
- Look agents up on social media and check whether they have a real track record of sales.
- Ask how often they negotiate and what buyers are able to ask for right now.
- Be upfront if you are shopping in more than one market, so the agreement can fit your situation.
- Bring every question, including what happens if the relationship is not a fit.
Experience matters because markets change quickly. Brad remembers when Trevor came to him in November 2023 and said they had just negotiated $30,000 in inspection repairs for their buyers. That was when the team knew the market was shifting. Trevor, who has helped over 200 families in the last four years, says inspection negotiations faded during the COVID market, when buyers sometimes waived inspections, but they are coming back.
Brad believes buyer agency exposed the average agent and highlighted those who are ahead of the curve on creativity and negotiation. Trevor's favorite line from the consultation sums up the team's standards: "We're not going to lie to you and we won't lie for you."
Who Pays the Buyer's Agent?
The Noll Team is paid at closing. Other companies may charge an upfront retainer, and buyers and agents can negotiate those terms. Brad adds that the team is not paid for its time. It does not matter whether a buyer sees one home or 100. "We're getting compensated for our expertise," he says, meaning how much money the team helps buyers keep and how confident they feel in the home they choose.
Sellers want the highest net offer, and some savvy buyers get creative. Brad describes buyers putting a large amount down who chose to pay the agent fee outside of closing so they would not finance it, which helped them win the home or bring the price down a little.
So how often do buyers pay the fee themselves? At the time of recording, Trevor estimates it has been under 5% of his buyers, with the fee covered about 97 to 98% of the time. It depends on the scenario. A buyer offering $50,000 or $70,000 under list price may find the seller less motivated to cover it, but the request is written into the offer and the expectation is set with the buyer from the start.
The Negotiations Nobody Talks About
Brad shares a fable about a factory losing money while a machine was down. After several people failed to fix it, a mechanic tightened one bolt and sent a $50,000 bill. When the company objected, he explained: "You paid me for my education to know which bolt needed fixed." Buyer's agents, Brad says, are not created equal.
Most people know about three negotiations: the price, the inspection, and sometimes the appraisal. But Brad says Indiana's purchase agreement is nine pages, with 497 lines and 76 checkboxes, and those checkboxes represent anywhere from 3% to 5% of the price. They cover items like method of payment, financing structure, seller concessions, buyer broker compensation, closing fees, contingencies, home warranties, and tax prorations.
"A couple of wrong checkmarks could cost you a lot of money," Trevor says. His goal is to save buyers as much as possible, and in competitive situations, to structure an offer that appeals to the seller while still protecting the buyer's investment.
Is a Buyer's Agent Worth It in Fort Wayne?
Brad notes that buyers are staying in homes around 11 years on average nationally, so the decision lasts a long time. Sometimes the win is keeping money in your pocket, and sometimes it is simply getting the home, because the appreciation over those years builds net worth.
"Educated buyers make more confident decisions," Brad says, and confident decisions keep thousands of dollars in buyers' pockets. For anyone six to 12 months from buying, he and Trevor recommend starting with a consultation and asking every question before signing anything.
▶ Listen to the full episode
Is a Buyers Agent an Expense or Investment?, on Moving Fort Wayne.
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