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Difference Between Listing Agent and Buyer's Agent in Real Estate

By
Robert Rico
|
Oct 30, 2024
4 min
Learn More - Our ProgramEnroll Now

Navigating the world of real estate can be confusing, especially when it comes to understanding the different roles of real estate agents. Two terms that often cause confusion are "listing agent" and "buyer's agent." While they may sound similar, they represent different parties in a real estate transaction. Let's demystify these terms and explore what each agent does.

What is a Listing Agent?

A listing agent, also known as a seller's agent, is a real estate agent who represents the seller in a property transaction. Their primary goal is to help the seller get the best possible price and terms for their property. Here's what a listing agent does:

Helps Set the Right Price

The agent looks at other houses that are similar (also known as Comparative Market Analysis (CMA)) and helps the seller decide how much to ask for their house.

Gets the House Ready

The agent gives tips on how to make the house look ready for showing so that more people will want to buy it. This might include cleaning, a fresh coat of paint, fixing things, or rearranging the furniture.

Shows the House to Buyers

The listing agent tells people who are looking to buy a house about the seller's house. They put information about the house on the internet and might even have an open house where people can view the house in person.

Discusses Offers

When someone wants to buy the house, the listing agent helps the seller decide if the offer is good or if they should ask for more money or different terms.

Finishes the Sale

Once the seller and buyer agree on a price and terms, the agent helps with the paperwork and makes sure everything is done correctly so the sale can be completed.

Who Does the Listing Agent Work For?

The listing agent's loyalty lies with the seller. They are legally bound to act in the seller's best interest, providing guidance and advice throughout the selling process.

Next, let’s look at the role of the buyer’s agent:

What is a Buyer's Agent?

A buyer's agent, often referred to as a selling agent , represents the buyer in a real estate transaction. Their role is to help the buyer find the right property and negotiate the best terms and price. Here's what a buyer's agent does:

Explains How Buying Works

The agent helps the buyer understand all the steps they need to take to buy a house. This includes things like looking at houses, securing a loan, and making an offer.

Finds the Right House

The agent listens to what the buyer wants in a house and then finds houses that match those needs. They help the buyer look at different houses and choose the best one.

Talks About the Good and Bad Points

For each house, the agent points out what's good about it and what might be a problem. This helps the buyer make a smart choice.

Makes a Deal

When the buyer decides on a house, the agent helps them decide how much to offer and what other things they might ask for, like fixing something that's broken. The agent then talks to the seller's agent to agree on a price and terms.

Finishes the Buying Process

After the buyer and seller agree on everything, the agent helps with the paperwork and makes sure everything is done right so the buyer can become the new owner of the house.

Who does the Buyer's Agent Work For?

The buyer's agent is dedicated to the buyer's interests. They provide advice and support to help the buyer make informed decisions and secure a favorable deal.

How Do Agents Get Paid?

When a house is sold, the seller usually pays a commission, which is a percentage of the final sale price. This commission is typically split between the listing agent's brokerage and the buyer's agent's brokerage. The listing agent's brokerage represents the seller, and the buyer's agent's brokerage represents the buyer.

The commission from a real estate sale is initially split between the seller's and buyer's brokerages. Following that, each brokerage allocates a portion of their received commission to the agent involved in the transaction. The specific percentage an agent receives is determined by their contractual agreement with their brokerage. This can vary widely; some agents may receive a larger share of the commission, while others may receive a smaller amount. For a more detailed exploration of how agents' earnings are structured, check out our blog post dedicated to real estate agent salaries.

Can One Agent Work for Both Sides?

In certain situations, a single real estate agent might work for both the person selling a house and the person buying it. This is called "dual agency." While this can make things simpler since there's only one agent, it can also be tricky because the agent has to look out for the best interests of both the buyer and the seller, which can sometimes be at odds with each other.

For example, the seller wants to get the highest price possible, while the buyer wants to pay as little as possible. It can be difficult for an agent to make both parties completely happy in this situation. Because of this, some places don't allow dual agency since it can lead to problems and isn't fair to everyone involved.

However, there are times when dual agency might work well. Let's say a buyer is looking for a very specific type of property in a rural area, and there's only one agent who really knows that market. In this case, it might make sense for that agent to represent both the buyer and the seller, as long as everyone understands the situation and agrees to it. This can help the transaction go smoothly, especially in a market where there aren't many options or agents to choose from.

Final Thoughts

Grasping the responsibilities of listing agents and buyer's agents is essential for anyone engaged in a real estate transaction. Whether you're looking to buy or sell, partnering with a well-informed and seasoned brokerage can greatly impact the success of your real estate endeavors.

Want to make studying for the real estate exam? Join our real estate crash course and exam prep program.

When you join, you get 8+ hours of video content designed to teach you the concepts, vocabulary, historical events, and laws you’ll see on the national real estate exam.

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Get both program together or individually. You can access the real estate crash course videos and prep package using the US Realty Training app.

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TL;DR: In real estate, a listing agent represents the seller, aiming to secure the best sale terms, while a buyer's agent advocates for the buyer, helping them navigate the purchase process. Both roles are crucial in guiding their respective clients through pricing, negotiations, and finalizing deals. Agents are compensated through a commission split between their brokerages. Dual agency, where one agent represents both sides, can simplify transactions but may also lead to conflicts of interest. Understanding these roles is vital for effective participation in real estate transactions.

By
Robert Rico
|
Oct 30, 2024
Real Estate Career
4 min
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