Hi all – I wanted to pass on a write up I did with some thoughts on using agent vs. going it alone when buying a home in the Bay Area after having just gone through the process last year. Feel free to DM me if I can offer any advice on your own search!

When, last year, my wife and I set out to buy a home in the East Bay, we initially assumed, like nearly everyone we knew, that using a real estate agent was a given. Friends, colleagues, and even the listing agents themselves reinforced the notion that going it alone was unthinkable in the Bay Area’s competitive market. After reading news coverage of the National Association of Realtor’s class-action settlement in 2024, however, we became more skeptical. We also ran the numbers and at an estimated $70,000, the cost was meaningful enough to give us pause. We decided to move forward with a dual approach, splitting our search between agent-assisted properties and homes where we represented ourselves. We learned a lot through the process and were able to dispel some myths about buying a home in the Bay Area.

Myth #1 – The seller pays the agent, so the service is free for buyers

The idea that buyers don’t pay for their agent is a persistent myth. In reality, whether the agent’s commission is paid directly by the buyer or indirectly through the seller, the cost is shouldered by the buyer. In the indirect case, payment takes the form of a lower effective offer for the home. For example, if you offer $500,000 for a home and use an agent, your effective offer is reduced by the agent’s 3% commission. That means the seller is really considering a less competitive offer of $485,000, not $500,000. Ultimately, it’s the buyer who shoulders the cost - often tens or hundreds of thousands of dollars.

Myth #2 – An agent will help you find a fair price

This may have been true before websites like Zillow and Redfin, which today allow buyers to access an unprecedented amount of market data. We used these sites to pull recent sales data and determine fair price-per-square-foot benchmarks for our top neighborhoods. With this data, we were surprised to find that the ‘comparable sales’ our agent sent to guide our offers were consistently the most expensive homes in the neighborhood. He gave us a variety of reasons as to why these homes were the right comparables, but to us the truth became clear. Because his commission was a percentage of the purchase price, our agent’s incentive was to convince us to pay as high a price as possible. In addition, a stronger offer would increase our probability of winning the house, and his chances of getting paid. Thus, our agent’s incentives were misaligned with our interests, and this influenced how he advised us.

Myth #3 – An agent is essential for navigating the paperwork

While agents can provide standard forms like the California Residential Purchase Agreement (RPA), they cannot advise you on contract language. In fact, the buyer representation agreement we signed with our agent stated this explicitly and advised us to contact a real estate attorney for advice on contract language. Additionally, the California RPA is a standardized contract that doesn’t typically change from offer to offer and you do not need to work with an agent to use the form. While there are other forms involved in the process, the bottom line is that most of the contracts you will use will be on standard forms that are available online.

Myth #4 – Listing agents won’t sell to self-represented buyers

Of all the myths we encountered, this was perhaps the most pervasive. Every listing agent we interacted with went out of their way to reinforce the idea that buying a home in the Bay Area without an agent was just ‘not something people do.’ At almost every open house we attended, when we informed the listing agent that we were self-represented, he/she invariably responded with ‘oh, that’s just not done in this market’ and ‘oh wow, I’ve never seen that before.’

To be clear, our agent did add some value during our search, especially in managing the paperwork and responding to follow-ups. But for us, these services were worth thousands, not the tens-or-hundreds of thousands of dollars agents currently earn per transaction. It just seemed ludicrous that our agent would make the equivalent of the annual salary of some teachers by putting in the fifteen or so hours he spent with us through the entire process. As our search progressed, we increasingly leaned into self-represented offers as we became more confident in our ability to manage the process ourselves. We ended up closing on a house in Oakland late last year after a self-represented offer we negotiated well below list price! Our experience taught us that, with the right preparation, buyers can successfully navigate the process without an agent - and save a significant sum in the process.