Here's the Real Danger of Working With the Wrong Real Estate Agent

If you're looking to buy a home, then it pays to find a real estate agent to help guide you through the process. In 2021, 86% of home buyers used a real estate agent, according to the National Association of Realtors.

But if you hire the wrong real estate agent, the home-buying process could become far more stressful and unrewarding. And in some cases, using the wrong real estate agent could mean falling into a dangerous financial trap.

When you choose the wrong person for the job

Many real estate agents are great at what they do and are dedicated to customer service. But if you find a real estate agent who isn't so motivated, it could result in you missing out on a lot of new listings as they hit the market. And at a time when the broad real estate market is sorely lacking in inventory, that could be a problem.

But that's far from the worst thing that might happen when you use the wrong real estate agent. Real estate agents commonly work on commission, so when you buy a home, they get paid (usually not by you, the buyer, but they get paid nonetheless). And the more expensive a home you buy, the more money a real estate agent stands to make.

The wrong agent, however, might push you to make an offer on a home that's out of your price range simply to snag a commission. And if you go that route, you risk a host of financial consequences.

For one thing, taking on too much house could mean falling behind on housing expenses or other bills. That could result in credit score damage. And even if you do manage to swing the costs associated with owning a more expensive home than you wanted, you might end up having to pinch pennies day in, day out. That's not exactly a great way to live.

That's why you'll need to be careful when choosing a real estate agent to work with. And also, you may want to err on the side of not hiring an agent who comes off as overly pushy and aggressive from the start.

It pays to shop around for a real estate agent

Just as it's a good idea to shop around with different mortgage lenders before signing a home loan, so too is it a good idea to talk to different real estate agents before hiring one. That way, you can get a sense of how they work and what their personalities are like.

It's also a great idea to ask for recommendations from friends, neighbors, and other people you know in your area. If someone you trust endorses a specific real estate agent and says they had a great experience working with them, then that should give you more confidence in that potential choice.

That said, you'll also want to do your own research. Ask each agent you speak to what their experience entails -- both in general and in the area you're looking to buy in. And ask how they're helping clients navigate the challenge of low inventory in today's market. Taking the time to ask the right questions could help you land on the best choice.