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Selling their home is not something most people do once a day (or even once a decade) so it’s perfectly natural to enlist a real estate professional to help with the process. Enter the real estate agent — specifically, one known as a seller’s agent. AKA a listing agent, these reps price and advertise your home, organize showings, negotiate with potential buyers and in general represent the seller throughout the real estate transaction, from initial listing to final closing.
While you do not need to work with a listing agent to sell your home, many people choose to do so because they can make the process go more smoothly and help maximize the sale price of the home.
What is a seller’s agent or a listing agent?
A seller’s agent is a real estate professional (a Realtor, a real estate agent or a real estate broker) who helps prepare and list a property for sale (the latter being the reason they’re also known as listing agents). They represent the person selling a property and must work in their best interests.
Seller’s agents handle many tasks involved with selling a home, including:
- Helping you analyze the market to figure out if it is a good time to sell
- Giving you advice for maximizing your property’s value
- Connecting you with other professionals to help prepare or improve your home
- Staging your home
- Listing your home on multiple listing services
- Helping you price your home
- Marketing the home: running tours, organizing open houses
- Serving as the go-between in negotiations with buyers
- Drawing up the purchase agreement
How do seller’s agents get paid?
Seller’s agents get paid on a commission basis. That means that they won’t be compensated until they close a deal.
Typically, when you sell a home, you have to pay a percentage — typically 5-6 percent — of the sale price in realtor fees. When the home sale closes, this fee gets taken out of your proceeds and paid to the agent’s brokerage (unless the agent is a broker themselves). The broker will take a cut and then distribute the rest of it to the agent who assisted you with the transaction. In most cases, the overall fee gets split between the buyer’s agent and the seller’s agent.
This method of compensation can be beneficial for sellers because the agent is incentivized to help you sell your home for a higher price.
Who does a seller’s agent represent?
A seller’s agent’s job is to represent the current homeowners who are putting their property on the market. Many agents, especially Realtors, subscribe to a fiduciary-like code of ethics, which requires them to disclose compensation amounts, be open and honest in all dealings, and to always put their clients’ interest first, ahead of their own.
However, there are some cases where a seller’s agent may represent more than just the seller.
Dual agency is a situation where the same real estate agent represents both sides in a transaction – meaning both the buyer and the seller.
This is a great deal for the agent because it means they get the full commission for the transaction instead of having to split it with another agent (the buyer’s rep). Because they’re getting the whole thing, dual agents might also accept a slightly lower fee overall — a plus for the seller. And some feel the whole transaction will go quicker and smoother, with only three parties involved.
However, this dual agency scenario is also a perfect situation for conflicts of interest. Even in amicable real estate transactions, the buyer and the seller generally have opposite goals.
The seller wants to secure the highest price and the fewest contingencies and conditions. The buyer wants to pay the least amount possible and get concessions from the seller. Having the same agent represent these competing interests can be problematic. At the end of the day, whose side are they on? Or whom do they favor?
In fact, some states, including Alaska, Colorado, and Florida, forbid dual agency entirely.
Does the seller’s agent represent the broker?
Although a seller’s agent represents you, the homeowner, they also represent someone else: a real estate broker. It’s the broker — either another, more experienced professional or a large firm — who is technically licensed to sell property and conclude real estate transactions. All real estate agents need to operate via a real estate broker.
When you work with a seller’s agent, you’re really working with a broker. The agent, as a representative of the broker, is the person involved with the day-to-day process of helping sell your home. The broker is your legal representative in the closing stages of the transaction, when the actual money changes hands, and has a fiduciary responsibility to put your best interests first.
It’s a little bit like a bartender working in a restaurant. The bartender presents a range of liquors and wines, mixes your cocktail, and collects your money. But they’re not actually authorized to sell you alcohol — it’s the restaurant (or restaurant owner) that holds the liquor license. You’re technically buying the booze from them; the barkeep acts as the restaurant’s representative in serving you.
It gets confusing because agents and brokers do overlap. A real estate pro can be both an agent and a broker. In fact, most brokers start out as real estate agents, and after years of experience, additional education and licensing exams, obtain their broker’s credentials. Many do keep on working as agents, too, actively selling properties.
Seller’s agent vs. buyer’s agent
If a seller’s agent is the person helping someone sell their home, that means a buyer’s agent is the person helping someone purchase a home.
The responsibilities of seller’s agents and buyer’s agents are relatively similar, with the obvious exceptions required by being on different sides of the transaction.
For example, where seller’s agents help homeowners prepare their property for sale, buyer’s agents prepare their clients by helping them think about what features are important in a home and checking multiple listing services to show them homes that are for sale in the area.
Buyer’s agents are also responsible for helping buyers tour homes, advising on offers and negotiating strategies, and posing questions or presenting the offers to the seller’s agent. If a deal is struck, they often go over the contract with their client, suggesting changes or contingency clauses.
A buyer’s agent is often referred to as a selling agent after a home’s in contract, because, by producing a purchaser, they caused it to sell. So, while they sound almost identical, be careful not to confuse a seller’s agent with a selling agent.