30 May The Difference Between a Buyer’s Agent and a Listing Agent

Buyers agent vs listing agent

Confused by complicated real estate jargon? You’re not alone! Even the most well-informed home buyers and sellers are often at a loss when it comes to fully understand who is actually who in the real estate world. But whether you’re in the market for a home or preparing to list your place, it’s helpful to have a firm grasp on a few real estate basics – namely, the correct terms for the major players in your real estate deal. To give you a better understanding, we’ve laid out a guide to understanding the differences between a buyer’s agent and a listing agent. 

The Basics

For example, the sellers hire a Portland listing agent to help them market and sell their homes. A potential buyer enlists their own separate Realtor, known as a buyer’s agent, to assist them with finding a home. 

Why Hire a Buyer’s Agent?

If you’re in the market for a new home, enlisting a buyer’s agent is a smart idea for several reasons. First, hiring a buyer’s agent means having a real estate professional who is looking out for your best interests. Second, Realtors bring a deep knowledge of the market. From average price points to neighborhood safety ratings, a local Realtor knows the location inside and out and can help you make a more informed decision. Third, Realtors have access to MLS (Multiple Listing Service), a website that compiles in-depth information about listings in the area. Finally, a buyer’s agent can assist with all legalities, negotiations, and paperwork.

Why Hire a Listing Agent?

If you’re planning to sell your home, hiring an experienced listing agent can make all the difference. According to Money.com, 90 percent of sellers use a listing agent to sell their home – and for good reason. A listing agent brings everything mentioned above to the table, as well as strategic plans for how to market and sell your home. The listing agent can also properly prepare your home for showings and bring the right prospective buyer to the listing.

So here’s where it gets confusing

Here’s the deal: Before any parties enter into a contract, the agent representing the buyers is still called a buyer’s agent. Once a contract is executed, the buyer’s agent can also be called a “selling agent.” A “selling agent” is an agent that has sold the home. They brought a buyer in and the buyer agreed to purchase the home. Therefore in the strictest sense of the word, that agent for the buyer is the “selling agent.”

“The terms ‘buyer’s agent’ and ‘selling agent’ are used interchangeably most of the time, especially once a deal is consummated,” explains Ron Bill, Broker of the Jupiter, Florida-based real estate company, Virtual Global Realty. “Usually, if say an Appraiser shows up and does not know who everyone is, I would still introduce myself as the listing agent, and the other agent as the buyer’s agent. It makes it clearer to everyone who is who,” Sam adds.

Long story short: a buyer’s agent can technically be called the “selling agent,” once a contract has been entered into. A listing agent is referred to as the “seller’s agent,” since they are representing the seller. Just remember: buyer’s agent = selling agent (sometimes); Listing agent = seller’s agent.

Can a real estate agent be both the buyer’s agent and the seller’s agent?

Short answer: Yes, they can – depending on the state.

Long answer: In an ideal real estate world, the buyer and the seller enlist different real estate agents to represent their separate interests. These Realtors (the buyer’s agent and the listing agent) are referred to as “single agents” because they pledge their confidentiality to their clients.

However, sometimes things aren’t so clear-cut. When a real estate agent ends up working for both the buyer and the seller, the single agent must transition to becoming a “transaction broker.” However, transaction brokers represent only the transaction. In other words: they don’t technically “represent” the buyer or the seller. Instead, they act as a neutral go-between. It’s worth noting that this is not allowed in all states. In states where it is legal, the agent must inform each party of the dual agency situation and receive each party’s consent before moving forward. 

Is this type of dual agency a good idea?

The upside to having a transactional broker is that it could end up saving you money. Normally, the sellers must pay their listing agent around 6 percent of the sale price as compensation for their hard work. The listing agent then splits this commission with the buyer’s agent. However, if only one agent (the transactional broker/dual agent) is involved in the deal, he or she doesn’t have to split their commission with anyone and may therefore, be willing to cut some of their commission to seal the deal. For this reason, some buyers believe that having a dual agent opens the door to more flexibility in the home’s price.

The downside to having a transactional broker is that real estate agents are only human – and humans have a hard time staying completely neutral in any situation. Given that the dual agent receives a percentage of the final sale, it’s hard to imagine that the agent would truly desire for the price to be lowered.

In closing

As you can see, the buyer’s and seller’s agents have different roles but similar goals. They both want the best deal for their client, they want the sale to close (otherwise they don’t get paid!), and they both want their clients to feel good about their experience so they will refer others to them. Educating yourself on their different roles can help you interview prospective agents and then decide who will give you the best service.