A Hawaii buyer's agent has you for the client. A seller's agent has the seller for the client. One of the oldest maxims is that no one can truly serve two masters. When it comes to critical negotiations or judgment calls, whom would you rather have the agent working for—you or the seller?
In the old days, agents almost always worked for the sellers. That is, they had a fiduciary or trust relationship with the sellers. What this meant was that if you offered $90,000 for a house, but in confidence told the agent you'd really be willing to pay $100,000, the agent was ethically and legally bound to inform the seller of what you'd said. Now, what do you think your chances would be of getting that property for $90,000?
Your only choice was to keep your mouth shut. Today, you can find a buyer's agent. A buyer's agent has a fiduciary or trust relationship to you. The agent ethically and legally should not tell the seller that you'd pay more. On the other hand, if the seller admits to this agent that they'd really be willing to accept $85,000, the agent must tell you! That's a huge advantage.
There's also a middle road today allowed in some states in which the agent can, theoretically, serve both buyer and seller—a "dual agent." This is murky territory and in attempting to avoid hurting either party by not passing along vital information, he or she could conceivably end up harming both. In a dual-agency arrangement, the agent attempts to protect both the buyers and the sellers.
The agent must declare whom he or she is serving. In many states this takes the form of a written document given to all parties. It's important to remember that who pays the agent doesn't determine whom the agent serves. Just because the seller is paying the commission, doesn't mean that the agent isn't working for you. It's whom the agent declares himself or herself for that counts.
What this means is that very often you can use a buyer's agent, yet don't have to pay that agent anything. Rather, the buyer's agent works for you and then, assuming the property is listed, gets a part of the listing commission from the seller. [On the other hand, you might have to pay. For example, if you buy a property for sale by owner (FSBO) and the sellers refuse to pay any commission, you might have to pay your buyer's agent.]
Finally, one of the not so obvious advantages of a buyer's agent is that this person often will be better able to find just the right house for you, including FSBOs.
On the other hand, some buyer's agents aren't worth the agreement they have you sign. Recently a friend was selling a home FSBO and was presented an offer $7000 below asking price. My friend was willing to pay the buyer's agent a half-listing fee, in this case 2 1/2 percent. But, the buyer's agent wanted a full 5 percent. So the agent said that since she knew the buyers would pay full price, my friend (the seller) should counter with a full-price offer, then pay her (the agent) the additional $7000 as a commission. Remember, she was presumably representing the buyers in all this, but was in reality screwing them out of $7000 in order to fatten her commission!
Certainly this example is an exception, but it's worth remembering that just because an agent says on a piece of paper that she or he is in a position of trust to you, doesn't mean it's guaranteed in real life. (By the way, if an agent works for you as a buyer's agent, you're the client. The seller is the customer.)