Listing agents and selling agents
It can be confusing for consumers, regardless of which side of the real-estate equation they are on. This is especially true when you have to deal with industry jargon. Both sellers and buyers can be confused by the terms “listing agent” and “selling agent”.
A listing agent represents the seller of a house, while a selling agent represents the buyer.
Let’s get into it deeper. What are the roles of each agent in a home-sale transaction? How do their responsibilities differ and how can they work together?
What is a listing agent?
A listing agent is someone who will help you sell your house. Listing agents are real estate agents who look after property sellers. They are responsible for effectively marketing the property they want to sell and setting the right price. They will help the seller find a buyer quickly and make a high-dollar profit.
You want to choose a listing agent who is familiar with your local housing market. If you aren’t sure where to begin, ask your family and friends for suggestions.
The following tasks are performed by a listing agent:
- List your home on listing services
- Negotiating with potential buyers regarding prices, contingencies, or other conditions
- Scheduling, managing, and promoting your home
- Pricing your home
- Assist with closing paperwork
Listing agents can sometimes be called a “seller’s agent” but they are completely different roles. These differences will be explained shortly.
What compensation is paid to a listing agent?
The listing agent is paid by the home seller. You will need to sign an exclusive agreement with the listing agent in order to market your house. This agreement ensures that the brokerage gets a commission when the property is sold.
The brokerage shares the commission with the listing agent. This arrangement is sometimes called “open listing”. It allows you to list your house with multiple agents.
A listing agent may accept a flat fee for putting your home on the market, but will not take on any other responsibilities. This arrangement is less common.
What does it mean to be a seller agent?
The buyer’s agent acts as their representative and helps them in searching for a home to buy.
Remember: Before you sign a contract with a selling agent, they’re referred to as the buyer’s agent. After signing the contract, they become the selling agent.
Buyers can benefit from working with either a buyer’s or selling agent (these terms refer to the same person) to help them navigate the home-buying process. By researching all available homes in your area that meet your criteria, selling agents can help you prepare your home to sell which will save a lot of time. When you find the home you desire, they will help you to make an offer.
Selling agents are responsible for:
- Finding potential properties to sell and then showing them off to buyers
- Buyers helped to find financing
- Assist with closing paperwork
- Fair price to ensure buyers pay fair prices for the home
What compensation is given to a selling agent?
Buyers have the advantage of working with an agent and can enjoy all the benefits without paying anything. The selling agent’s brokerage pays the listing agent; the buyers they represent don’t have to pay any of it.
To receive compensation for connecting them with the right buyers, the selling agents work in partnership with brokers who are selling the house. A commission is paid to the listing broker by the seller agent for finding the buyer. The selling agent can receive a commission if the client of the selling agent submits an offer. Once the seller accepts the offer, the co-op commission is earned.
Can an agent assume both of these roles?
Although a real estate agent can be both a listing and selling agent, they won’t usually take on the two roles for the same property. Two real estate agents may work for the same brokerage and represent both sides of the transaction. This is called “dual agency”.
The buyer side is often misinformed that you can ask the listing agent to become your selling agent if you find a home that you like on your own. This is because they might be willing to pay double commissions if you are a buyer. However, this is not ethical. It is not ethical to work with an agent willing to abandon their fiduciary responsibility to prioritize the seller’s and their needs over yours.
A buyer can make an offer for a house without the assistance of a seller agent. However, the listing agent will not be able to act as the buyer’s agent.
Bottom line: Listing agent vs. Selling agent
A listing agent will help you price your house, find the right buyer, and close the deal if you are selling a home. You will need a listing agent to help you search for homes that meet your criteria, guide you through the closing, and take you on home tours.
The listing agent and selling agent work together to make sure the home-buying process is smooth for the buyers and sellers, even if they don’t know each other. Each agent can serve as a mediator between buyers and sellers, helping to negotiate and ensure everyone is satisfied with the sale.
Working with a real agent to sell your home is a costly decision. You’ll need to pay commissions, but they handle a lot of the heavy lifting. Keep in mind that understanding how real estate commissions work will help you get the best price for your home. The costs of finding buyers and handling all paperwork can be very costly.
Both the selling agent and the listing agent will split the commission agreed to by the property seller. If the commission for a property is 8%, each agent will receive 4%. The entire commission is retained by the listing agent if they find a buyer for the house on their own. The home seller gets the same amount regardless of how the house sells.
You should take the time to find the right agent for you, regardless of whether you are selling or buying. You want someone who has the experience and will look out for your best interest.