Are real estate agents really just overpaid tour guides? 

If a home is listed with an agent, it means the seller has decided that you pay a commission. To prevent doing so, you can limit your search to ‘for-sale-by-owner’ properties, but you will drastically limit your selection of available homes in the process. You are also at the mercy of the seller.  Did the seller save you money or just make more himself?  Who will insist on a signed disclosure document revealing past damage and potential problems with the home?  Will the seller point out reasons not to buy the home?  Will the seller recommend a qualified pest and home inspector? Will your home close quickly? It is a proven fact that 80 % of all homes are listed with a real estate agent and for good reasons.

When selling by owner, there may be more flexibility on the price of the home, but the sellers are not likely to give away all the commission savings or they would have listed their home with an agent. The seller's motivation is to keep all or part of what he or she would have paid in commissions.

Additionally, you must do your own research to learn what costs are customary for a seller to pay in your market and what cost the buyer usually pays. You must determine the market value of the home.  You must also be able to select a home and termite inspector, both of which usually come recommended by an agent. A real estate agent would also ensure you close on your home in a timely manner.

Regardless of whether you use an agent or not, you will need a real estate attorney to review the closing transaction, because an agent cannot provide legal advice. However, if you don’t use an agent, you will need many more hours of the lawyer's time, at a much higher cost than if an agent had done much of the services.

A first-time homebuyer is well served by selecting a buyer's agent to represent the buyer’s interests in a real estate transaction, as long as the buyer takes the time to sign a buyer’s contract with the agent. Otherwise, the agent will always represent the seller, even if the buyer brought the agent into the transaction!

Whether you are buying or selling a home, your real estate agent could be one of your most valuable resources. For one thing, a real estate agent can suggest ways to accrue the down payment on a new home. Your agent can also explain alternative financing methods. In addition to knowing the local money market, he or she also can tell you what personal and financial data to bring with you when you apply for a loan.

Your real estate agent is already familiar with current real estate values, taxes, utility costs, municipal services and facilities, and may also be aware of local zoning changes that could affect your decision to buy.  Your agent can usually research your housing needs in advance through a Multiple Listing Service--even if you are relocating from another city, to show you only those homes best suited to your needs--size, style, features, location, accessibility to schools, transportation, shopping and other personal preferences.

Your agent can often suggest simple, imaginative changes that make a home more suitable for you and improve its utility and value. Because a real estate agent is sensitive to the importance you place on this major commitment, he or she can facilitate negotiation of a win-win agreement that will satisfy both buyer and seller.

Overpaid?  Add up the time, expenses in gas, vehicle maintenance, dues, license and education fees, internet and print advertising, cell phone and digital camera expenses, taxes, insurance, office feesand agency commission splits.  Buyer agents may show dozens of homes which may or may not result in a sale.  Seller agents spend even more money in internet and print advertising, yard signs, visual tours, and open houses.  When this is all considered, a typical transaction results in the agent taking home a small fraction of the total commission.  A good agent can save you tens of thousands of dollars by turning you away from a house that showed hidden signs of structural problems or water problems.  Or by suggesting that you use qualified honest financing companies, home and pest inspectors. 

In conclusion, it is preferable to hire a real estate agent to guide you through the perilous task of buying a home. It is also best to have an exclusive buyer's agent rather than a dual agent who represents both seller and buyer. As a homebuyer, you want to know 'your' agent is working for you.   Agents are definately not overpaid, and are much more than a tour guide.