Ahhh, the old buyer agent discussion. :)
Two things to keep in mind about all of this (and some of this may vary by state). First, the seller does not pay the buyer agent's commission, no matter what anyone says. The listing agreement that the seller signs specifies the commission that the seller will pay to the listing agent's firm. Period. That's the listing commission.
The listing agent or the listing agent's firm then decides how much of a fee they will offer to other agents as an enticement for them to show the property, and the seller typically has to agree to it on the listing agreement--that's generally referred to as a co-broke fee. But that's a FEE paid by the agent, not a COMMISSION paid by the seller. Yes, the fee comes out of the listing agent's commission, but the seller does not compensate the buyer agent, the listing agent does.
So legally, if a seller agrees to pay their listing agent 5 apples, they owe the agent 5 apples whether another agent brings a buyer to the transaction or whether the buyer comes directly to the listing agent. (PRACTICALLY speaking, some listing agents will agree to reduce the commission if they don't have to pay that co-broke fee, but why should they? They're doing more work if the buyer doesn't have their own agent.)
Now, if you, as a buyer, hire a Buyer's Agent, you will be signing an agreement that says how much you will pay your Buyer's Agent for a successful transaction, regardless of what the co-broke fee might be on any given property. Let's say your agent is amazing and they charge their clients 3 apples. You will owe them those 3 apples whether the listing agent is offer a co-broke fee of zero, 2 apples, or 3 apples. Usually the Buyer Agency Agreement will state that any co-broke fee offered by a listing agent or firm will be credited against the fee you owe your Buyer Agent--but again, that does not mean the seller or listing agent is paying your Buyer Agent fee. So if the co-broke fee is 2 apples and you've agreed to pay your agent 3 apples, your closing costs will include the 1% difference that you will owe your Buyer Agent. And yes, before you submit an offer on a property your Agent should tell you what that co-broke fee is and whether you'll be obligated for any difference if you purchase that property.
Why would any sane buyer agree to do that?!!
Because if you're working with a real estate agent who you have not hired as a Buyer's Agent, they owe you nothing because you're paying them nothing. (In New Hampshire, they're known as a Facilitator). In that case, the listing agent is compensating them with the co-broke fee--if that co-broke fee is 1%, that's what your agent gets; if it's 3%, that's what they get; if it's zero (as some builders are doing now), your agent is SOL. And the degree of service you get is minimal--they're just opening doors and handing you paperwork.
Once you hire them as your Buyer Agent, they now owe you several fiduciary duties, including loyalty (meaning they have to keep your best interests above their own and others whom they don't represent), confidentiality (they can't tell a seller or seller's agent anything about you that would compromise your negotiating position), and disclosure (meaning if they know anything about a seller or a property that could help you, they must tell you). But if you don't hire them as your Agent, you're not entitled to any of that. And yes, you can hire a Buyer's Agent for a specific property, or any period of time (as long as the agent is willing to do it).
Personally, being an Exclusive Buyer's Agent allows me to provide much better service to my clients, so I insist on it, even if it's just for a single property. But I make sure people understand the distinction between a Buyer Agent and a Facilitator when I first meet them, in terms of service and compensation; I tell them not to hire me until we've gone to see a few properties and they decide if they like and trust me; and I give them a service guarantee that says if they aren't happy with me at any time, they can fire me.
I understand the investor mentality that "whoever brings me the deals is who I work with," but are you really better off working with and paying a great Buyer Agent than hoping a herd of mediocre agents will lay dead mice at your feet? You get what you pay for. If you want to vet an agent before deciding to hire them, call their broker and ask for a list of all their transactions in the past 5 years (keeping in mind that longevity is no guarantee of quality, and inexperience does not necessarily indicate a lack of quality).
And to whoever suggested that agents should get paid an hourly wage, I say, Hell yes! Sign me up! I'd be filthy rich right now if I got paid by the hour.
