Real estate agents play a major role in real estate transactions. Whether you are buying or selling a house, working with a real estate agent can be very helpful.
However, hiring a real estate agent can be quite challenging for those who don’t know the difference between a listing agent and a selling agent. Even some experienced property sellers and buyers still don’t understand who is actually who in the world of real estate. Even though they may sound similar, they usually act in different capacities. So, what is a listing agent? What is a selling agent? Who should you contact and when? Being able to differentiate between a listing agent vs selling agent is important, especially if you are buying or selling your first property.
To give you a better understanding of these two real estate terms, I have laid out this listing agent vs selling agent guide. With this piece of knowledge, you may gain a little more confidence as you work your way through the buying and selling process.
Here are the listing agent vs selling agent basics:
The listing agent, also referred to as the seller’s agent, is an agent that exclusively represents a home seller. Hiring an experienced listing agent can make a huge difference if you are planning on selling a house. The real estate listing agent will typically sign a listing agreement that gives them the authority to represent the seller. They will receive a commission for selling the home on your behalf. Of course, it is possible to sell a property on your own. However, if you are a first-time seller with little experience in real estate and real estate marketing, it’s better to work with an agent.
With their experience and knowledge of the real estate market, a listing agent can help the property seller in the following ways:
- Run a comparative market analysis to find the property’s value. This helps them to know how to reasonably price your home.
- List a property for sale on the MLS or on off-market listing sites, if you prefer. They will often hire a professional photographer so that the property can be showcased in the best light possible.
- Put strategic marketing plans into action.
- Give the seller insight into what property buyers are looking for in the current housing market.
- Prepare the home for showings through proper staging.
- Review offers from prospective buyers to find the best one.
- Handle closing negotiations and paperwork.
The term “selling agent” can be confusing. You may think that it is linked with the listing agent. However, the selling agent (also referred to as the buyer’s agent) exclusively represents the buyer in a home sale. The selling agent signs an agreement to represent the buyer and to work in the best interest of the buyer. Most of the time, these two terms (selling agent and buyer’s agent) are used interchangeably. However, it is important to note that the agent is referred to as a “buyer’s agent” before a real estate contract is signed. After the deal is consummated and all terms are agreed upon by both parties, the agent is designated as the “selling agent.” This is because they brought in a buyer to purchase the property. Therefore, the agent has sold the home.
If you want to purchase a new home or investment property, you just tell a selling agent the kind of house you want and they will help you find it. With a selling agent, you will be able to make a more informed decision and pay the right price. This is because they have a deep knowledge of the real estate market. A good buyer’s agent should know about the local real estate laws, neighborhood safety rating and amenities, types of properties for sale, average property prices, etc. Getting all this information on your own would take countless hours.
If you are looking for a new home in the market, consider enlisting a buyer’s agent. This agent will help you in the following ways:
- Search for your desired property by looking at listings in the area, typically using the multiple listing service (MLS).
- Help you find suitable financing.
- Set up showings for you with listing agents.
- If you like a particular property, they will help you create an offer and present it to the listing agent.
- Negotiate for the best possible price and terms on a purchase.
- If the offer is accepted, they will guide you through the closing process and paperwork.
Listing Agent vs Selling Agent Commission
Usually, when you work with both the listing agent and the selling agent, the property buyer typically doesn’t pay an agent commission. The selling agent gets his commission from the property seller at the closing of the deal. Both agents will share the real estate commission agreed to by the property seller. For instance, if the commission is 6 percent of the sales price, each of the real estate agents will get 3 percent. However, if the real estate listing agent lists the property and finds a buyer without using a selling agent, they will keep the entire commission. On the other hand, if you are buying a For Sale by Owner (FSBO) property, you may have to pay the selling agent a fee. Be sure to read out your agreement and clarify this with your selling agent before signing.
The Bottom Line
If you are looking to be involved in a real estate transaction, you will probably work with a listing agent (seller’s agent) or a selling agent (buyer’s agent). Though their titles might sound similar, their responsibilities in a real estate transaction are different. In an ideal real estate world, the listing agent represents the property seller in marketing and selling their home. On the other hand, a selling agent will represent a property buyer in finding and purchasing the right home. It’s important to know the listing agent vs selling agent differences before you hire any of them.
Hiring a real estate agent will definitely cost you money in commission fees. However, it is well worth it. They usually have extensive exposure to the real estate market. They also have a clear understanding of the process, important documents, and legalese when it comes to closing the deal. However, to sell your property for top dollar or get a profitable investment property, make sure you take your time to find the right agent who will look out for your best interests. Before you hire a listing agent or a selling agent, interview a number of agents and ask them the right questions. You should also ask for references from their former clients.