They know real estate the way most people do not. The analogy here would be trying to write a giant enterprise piece of software you plan on supporting for the next 10-30 years without the benefit of any experience as a developer.
On a practical level, they can generally guide you through the very intense process of lining everything up to buy a property (this process takes months, and a whole lot of phone calls and paperwork). They know prices, and can tell you what something is worth. They can spot problems with the property before you get a (very expensive) inspector on site. They help you negotiate and buffer you from the seller and the seller's agent. This is particularly valuable since a good deal can go bad because personalities clash. They help you find professionals to work with (attorney, bank, inspector, etc.) if you want them to (all of these are up to you, but if it's all the same to you, then they generally have good suggestions).
The analogy here would be trying to write a giant enterprise piece of software ... without the benefit of any experience as a developer
Where I'm from (the UK), people don't try to write giant enterprise software without any experience as a developer. They _do_ buy houses without a buyer's agent, and have done so for a long time, without problems.
There _are_ special functions which require the help of professionals:
- Conveyancing: actually executing the sale and ensuring ownership is transferred. This is dealt with between two lawyers, one on each side.
- Surveying: checking that the property is in sound condition and, if the property will be financed by a loan, appraising the value to ensure it's suitable security given the size of the loan.
Each of these services are provided by regulated professionals (solicitors in the first case, chartered surveyors in the second). Each are subject to a flat fee (i.e. not related to the sale price) which is the hundreds of pounds (not thousands).
I don't see how the US market is so structurally different (vs. the UK) that (i) the buyer needs an agent, and (ii) fees are so high.
The real estate agent is incentivized to make good suggestions because they work with the same people frequently and they want the house to close and get their check. However, the lending broker also has the same motivation and frequently is the one that handles all that stuff.
On a practical level, they can generally guide you through the very intense process of lining everything up to buy a property (this process takes months, and a whole lot of phone calls and paperwork). They know prices, and can tell you what something is worth. They can spot problems with the property before you get a (very expensive) inspector on site. They help you negotiate and buffer you from the seller and the seller's agent. This is particularly valuable since a good deal can go bad because personalities clash. They help you find professionals to work with (attorney, bank, inspector, etc.) if you want them to (all of these are up to you, but if it's all the same to you, then they generally have good suggestions).