When you hear the word “agent,” it’s assumed that it is a person who acts on your behalf. Travel agents, insurance agents, and, of course, real estate agents are trained to represent your interests, offering you pertinent information before making some of the big decisions.
In the real estate world, terms abound where agents are concerned. However, for the purposes of this article, let’s just say that a listing agent agrees to help you sell your home (sometimes called a seller’s agent), and a buyer’s agent brings buyers to see it/purchase it (selling agent).
Redfin’s Julia Weaver says that learning to quickly recognize what these terms refer to in real estate jargon can help you move forward confidently with buying or selling your home, and she breaks down the differences as well as the expected responsibilities of each, starting with the person who comes to your house, looks around, and offers to help you sell it. “A listing agent … is a real estate agent who represents a home seller in a real estate transaction,” she explains. “A listing agent is responsible for assisting their client throughout the home selling process, which includes pricing the home, staging the interior and exterior, marketing the property, negotiating offers in the best interest of the seller, and so much more.”
On the flip side is the buyer’s agent. This person represents the homebuyer in finding a house and guides them through the purchase of that home — not as simple a task as it sounds. A buyer’s agent turns into what is lovingly called the “selling agent” (in real estate legalese) once a contract is signed, so don’t get too confused about the terms on paper. Buyers’ agents help search for properties that meet the buyer’s budget and desired characteristics, give house tours, submit and negotiate an offer on the buyer’s behalf, and do everything they can to ensure their client gets the best deal possible.
While licensed real estate agents are tasked with either of these roles, many specialize in one or the other, since once they have been in business for a while, they often become branded for being either a buyers’ or a sellers’ agent.
While listing agents offer the homeowner’s product to the buying public, they also act as guides through the process of getting the highest offer in the shortest amount of time for their clients. They must be responsive to the seller’s questions, advise them on pricing (based on comparable sales in the neighborhood), market the house (ads, flyers, open houses, networking with other agents) and they often recommend ways to make a house more presentable to the widest range of buyers possible (staging). Once offers begin to happen, they help with negotiation strategy as well.
In simple terms, this entire process begins with someone who wants to sell their home. The homeowner may interview several agents to list their home and make a decision from there. Perhaps they’ll find someone who is already a neighborhood expert. It could be a friend of theirs who happens to be an agent. Or they may look for listing agents online and invite one or two over after reading their profiles.
Once the seller feels confident in choosing the right person and agrees to the pricing (a delicate and tricky task) and suggestions this agent recommends, the ball starts rolling, starting with the listing agreement. This important document is a written contract that gives the agent the exclusive right to sell the property on the seller’s behalf. It outlines their commission, obligations, and responsibilities and gives the agent the sole authority to market and sell the house within a set time frame.
Should work need to be done to the house before it hits the market, the listing agent should also be able to recommend contractors and service providers to assist with these repairs and improvements. “The listing agent also writes the listing description, creates the sales brochures, places the “For Sale” sign in front of the house, and markets the property through both online and offline channels,” says Weaver. “They will either give you tips on staging your home yourself or recommend a professional home stager.”
From there, they present all offers to the seller, helping them through the process of multiple offer scenarios and bidding wars, (more the rule than the exception to it in many parts of the U.S. right now) and terms of the sale (contingencies, length of escrow/occupancy). “A good listing agent proactively communicates with their client, quickly responds to any questions, and keeps any negotiations moving forward,” says Weaver. “An important, although unofficial, role of the listing agent is to keep everything as low-stress as possible.” While you are free to choose your own title or escrow company, the listing agent typically recommends a specific company they like to work with because of their record for a quick closing, for example.
Now let’s shift gears. A buyer’s agent is basically your tour guide to finding a home, whether online or in person. This licensed real estate agent takes you through the entire home buying process, locating properties to see, answering questions, doing due diligence on all aspects of the properties being considered (location, services, schools, etc.), and offering advice. This agent typically works for a different brokerage than the listing agent.
Once the buyer names all the attributes and amenities they want in a home (bedrooms, bath, square footage, lot size, location) as well as qualifies for a mortgage up to a certain amount, the buyer’s agent will provide lists of homes that meet the buyer’s requirements. “Multiple listing services (MLS) are the primary source of home listings information because they contain real-time information on virtually every home listed for sale in a given area, and is the primary source where agents will pull data on houses for sale in the area you’re looking to move,” says Weaver. This agent typically knows the local market like the back of their hand and has a sense of what homes actually sell for, checking closed sales on a daily basis. “When you decide on a home you’d like to make an offer on, the buyer’s agent will help you decide on how much you should offer and which contingencies you might want to include,” she says. The buyer’s agent is also adept at pointing out the home’s strongest selling points as well as its detractors, addressing any questions or concerns the buyer may have.
“Once the buyer narrows down the properties they’re interested in, the buyer’s agent advises them on pricing and negotiation,” says Weaver. “They’ll also help their clients structure and prepare offers. Then they negotiate with the listing agent to help get their buyer the best possible price and overall deal.”
The listing agent and buyer’s agent are paid a commission, which is around 5%–6% of the home’s sale price, and evenly split between them, but there are exceptions to the rule depending on agent and location. The seller of the home typically pays the commission for both the buyer’s agent and the listing agent.
Can one person do both? The answer is — yes, and it’s called “dual agency.” “This occurs when one agent represents both the buyer and the seller in the same real estate transaction,” says Weaver. “The main ethical dilemma with dual agency is that the agent has to remain completely neutral to both the buyer and the seller and cannot put the interests of one party over another. This means you lose one of the biggest perks of working with a real estate agent – their responsibility to get you the best deal possible.” She adds that in every state, a dual agent must disclose to the buyer and seller that they’ll be representing both sides of the transaction and get approval beforehand. “A dual agent cannot represent both clients without them knowing. Each state has its own laws around dual agency, so it’s important to look into your state’s regulations before signing any dual agency agreements.”