Listing agent vs selling agent: What’s the difference?
Real estate transactions, in some ways, can make you feel like a big Hollywood star. There are people taking pictures of your house. You may have staging that you need to do. People ask you about how you live and what your area is like. Yes, the best agents know how to give their clients the celebrity treatment.
But when it comes to choosing agents and understanding their different roles and responsibilities, what’s the difference between a listing agent and a selling agent?
Simply put, a listing agent (also called a sellers agent) helps clients put their properties on the market to be bought by a potential buyer. Selling agents (also called buyers agent), help clients who are looking to purchase a home. However, there’s a lot more to what each real estate agent does than just that.
To clear things up, let’s take a look at listing agent vs. selling agent.
What is a listing agent?
So you want to sell your house? What steps should you take to facilitate this real estate sale process? While you could go the DIY route by putting up flyers in your local church bulletin and hosting a literal yard sale, you’re likely going to have an easier time and better results by working with a qualified listing agent.
A good listing agent will lead to a less stressful selling process and will likely help increase quality offers from prospective buyers for your home. This real estate professional achieves these goals in a number of ways:
Setting an asking price: You can’t put a price on what your home has meant to you over the years. Of course, if you’re selling it to a home buyer, you’re going to have to. But it can be hard for a seller to objectively value their property. A listing agent takes care of this issue for them. An excellent listing agent will know the current housing market in the real estate industry, research your specific area, and compare your home to similar houses that have been sold nearby within the real estate industry. Your real estate listing agent will then come up with what they think is a good asking price for your home. This is important to make sure you get the best offers. If your sales price is too low, you won’t get all you can for your house. If it’s too high, you may not find a buyer at all.
Market your home: A listing agent will list your home on their agency’s website as well as other real estate listing sites. They’ll utilize social media as well as local newspapers. Basically, they’ll be sure anyone interested will have no trouble finding your home so you get the most possible offers.
Make your home more attractive: Why should a buyer care if your dirty laundry is on a bedroom floor or if the hedges outside your house are overgrown? They’ll change it all anyway, right? Maybe, but first impressions affect how much people are likely to bid on your house. A good agent knows what sells houses. They’ll help you with proper staging to make your house as appealing as possible. You only get one chance to make a first impression and a good one could mean a much higher offer for your home.
Communicate: Your agent will work with buyers’ agents and go over all offers with you. While it’s easy to think that you should simply accept the biggest offer, there are often contingencies and other factors worth considering that can affect your sale. An agent will clarify all these elements so you can make the best possible decision. Eventually, when a contract is written, it is important to discuss the difference between under contract vs pending with your agent.
At Berkshire Hathaway HomeServices California Properties, we know that choosing the right agent is key to having the best home selling experience. Whether it’s setting up an asking price or navigating through closing costs real estate, we’ve compiled some questions you should be asking when determining the best agent for you.
What is a selling agent?
So you want to buy a house? Much like our hypothetical seller from earlier, you can opt for the DIY route and just drive around the area you want to live looking for “For Sale” signs, but you’ll probably have more success working with an agent. In this case, buyers will want to opt for a selling agent (the buying/selling terminology can be confusing if you’re not familiar with the term).
What can you expect from your selling agent? Again, the best agents will be responsible for many different things:
Manage expectations: Home buying can often be a period of big dreams. We all picture the perfect home with our ideal open concept, innumerable bathrooms, and expansive backyard. And there’s nothing wrong with knowing what you want, but you also need to know what’s realistic. Selling agents will talk with you about your finances, whether you’re pre-approved for a loan, etc. They will then be able to use this information to show you homes that fit within your budget. You may not get everything on your wish list, but you’re more likely to have your offer accepted if the home you offer fits your budget.
Show houses: Once your agent knows what you want and what you can afford, the fun can start. They’ll work with listing agents to see what’s available in your area and start showing you your options. This way you’re no longer driving around aimlessly, you can assess your options with intention.
Educate: House buying is complicated and, for many people, it’s a purchase they will only make one or two times over their entire lives. You can’t very well be an expert if you don’t have experience. Thankfully, your agent will be experienced at home buying. They can guide you through the process and make sure you understand your options fully.
Negotiation: Your agent will handle the back-and-forth with the listing agent until you and the sellers reach an agreement. It is in their best interest for you to successfully purchase a home so they should communicate in a timely fashion to make sure your offer is as competitive as possible.
Just like with a listing agent, choosing the best selling agent comes down to asking the right questions. Take a look at our suggested list to make sure you know what to ask.
How do agents get paid?
Following basic logic, you might assume that the seller pays the listing agent and the buyer pays the selling agent. While that makes sense on the face of things, it’s not how the system works. Instead, the seller pays both agents.
This is because agents don’t get paid directly. Instead, they receive a commission, which is a percentage of the total sale. These days, commissions tend to be anywhere between 4% and 6% of the sale price, with different agents charging different commissions. Not all of this commission is likely to go to one person, though. Instead, it will be split between:
If you work with an independent agent, then none of the commission will go to a larger brokerage. If either the buyer or the seller works without an agent, then there will be no split commission. Then there’s the case where the listing agent is also the selling agent and the entire commission goes to them. This is called a dual agent.
What is a dual agent?
In some circumstances, the same agent can work for both the seller and the buyer. In this situation, that agent would be considered a dual agent.
The main concern with a dual agent is that there may be a conflict of interest involved in representing both buyers and sellers. This is a large enough concern that some states have deemed it illegal to act as a dual agent. States where this practice is illegal include:
If you decide to work with an agent serving both roles, you must choose someone worthy of the trust you’re placing in them. If you can find someone trusted by both sellers and buyers, there are some benefits to this scenario:
Speed: Agents help clarify and can generally make real estate transactions easier, but the more middlemen involved in a transaction, the longer communication takes. Having one agent as the go-between for both the buyer and the seller can lead to faster negotiations and a smoother overall experience.
Possible buyer savings: While the obvious potential conflict of interest in this scenario is that the agent would favor the seller since the higher the sale the higher the commission, this isn’t always the case. Since the commission won’t be split, the agent may be more willing to advocate for a buyer with a lower offer if it facilitates a sale.
Property knowledge: The listing agent will have a more in-depth knowledge of a property than a selling agent will. Therefore, buyers may get better knowledge from a dual agent than they would from having their own selling agent. This can run into another conflict of interest, though, if the seller doesn’t want certain information to be disclosed to potential buyers.
As you can see, dual agency scenarios, while in some ways simplifying the process, can also cause certain complications. It still may be a preferable option for some, but you’ll want to consider both its positives and its negatives before entering into a dual agency agreement.
Find your new partner in real estate with California Properties
No matter if you’re looking for a listing agent or selling agent, you want to make sure you have the best agent. At California Properties, our agents look out for you to make sure you have the smoothest possible transaction. If you’re also wondering, “what is a fixed rate mortgage,” we’ve got you covered! Working with an agent can be a lengthy relationship and it should be one built on trust. We’re proud to show you why you should trust us.