Before proceeding with the variances between listing agents and selling agents, let us check the difference between listing and selling price.
The listing price, also known as the asking price, is the amount the seller has listed the property for. The selling price is the amount the property sells for. In a seller’s market, multiple buyers to bid for the same property. This boosts the selling price above the listed price.
A common strategy of sellers is to set the asking (listed) price slightly above what the property is worth. The final price after negotiations would then be very close to the asking price.
Let us now check the different roles and responsibilities of listing agent vs. selling agent.
- Defining Listing and Selling Agents
- Listing agent role
- Selling agent role
- Commission Structure and Compensation
- Commission split
- Factors affecting compensation
- Comparing Listing and Selling Agents
- Clients served
- Goals and objectives
- Dual Agency: Pros and Cons
- Benefits of dual agency
- Drawbacks and legal concerns
- Choosing the Right Agent for Your Needs
- Researching agents
- Assessing agent expertise
- Essential Skills for Real Estate Success
- Market knowledge
- Customer service
Defining Listing and Selling Agents
Let us now go into the intricacies of the parts played by a listing agent and selling agent in a real estate deal. It depends on who represents them. Listing agents work with sellers while selling agents work with buyers. Both agents work individually to complete a transaction and earn a commission.
Listing Agent Role
Sellers of a property hire a listing agent to market their homes.
Here are some of the typical responsibilities of a listing agent.
- Research the price of homes
- Arrange for a home inspection and appraisal
- Develop a listing strategy
- Arrange professional photography and home staging for the property
- Create marketing materials and a copy of the property listing page
- Supervise all marketing efforts like networking with other agents to find potential buyers
- Coordinate showings and receive offers from potential buyers.
- Handle negotiations on behalf of the seller
- Complete closing paperwork.
Selling Agent Role
What responsibility does the seller’s agent have to the buyer? Selling agents help buyers find and purchase homes. A seller’s agent represents the buyer but after the contract is signed, the name selling agent is used.
The key responsibilities of a selling agent are as follows:
- Narrow in on what buyers are looking for such as home size, home features, location, and price.
- The selling agent will arrange for a mortgage pre-approval and help finalize the budget and financing options.
- Research available homes as per buyer’s needs, schedule showings, and attend them with the buyer.
- Write offers and counteroffers and guide negotiations
- Arrange for a home inspection
- The selling agent helps buyers to navigate the closing process.
These are the main roles carried out by the listing agent vs. the selling agent.
Commission Structure and Compensation
The seller and the listing broker sign a contract when a property is put up for sale. The contract details the terms of the listing including the commission which is the broker’s compensation which is always negotiable.
Let us check how the selling agent vs. listing agent split the commission received from a sale and what percentage goes to the broker.
Commissions in real estate vary between 5% to 6% of the final sale price. The amount paid to the brokerage by the seller is often shared by the buyer. However, sellers sometimes add the commission to the asking price, making the buyer indirectly pay a part of it too.
Brokers and agents split the commission of 5 to 6 percent of the sale price in the ratio of 50/50 or 30/70. Thus, the commission is divided between the listing broker and agent, and the buyer’s broker and agent.
Factors Affecting Compensation
The fees and commissions split of listing vs. selling agent vary by firm and operating models. There may be a tiered split, consistent split, or 100% real estate agent commission. The commission received also depends on the transaction fees, office supply fees, and desk fees charged by the brokerage. Often, firms offer bonuses, set salaries, or profit sharing.
The reputation of the firm an agent has signed with indirectly affects the compensation in some ways. A top-reputed firm gets more clients, handles high-end luxury properties, and thus offers more commission to agents.
Comparing Listing and Selling Agents
The roles of listing agents and selling agents are easy to segregate. While the former helps to market your home, the latter finds a buyer for you. Their part in a real estate transaction vis-à-vis clients served are quite different.
Clients served are different in listing vs. selling agents. Let us look at each individually.
Sellers use a listing agent to market homes on their behalf. The agent handles all aspects of the transaction. It includes researching the price of the home, creating marketing materials, and closing the deal. The agent also arranges for a home inspection, networks with other agents for potential buyers, and handles all negotiations.
A selling agent, also known as the buyer’s agent helps buyers to find and purchase homes. Their interaction with clients is different from a listing agent. Their responsibilities include conducting the search for a home, helping in pre-mortgage approval, and guiding negotiations. In short, a selling agent handles and navigates the whole buying process.
Goals and Objectives
The goals and objectives of a listing vs. selling agent are different as seen in this post. A listing agent works on behalf of the seller to successfully negotiate a fair price. The selling agent ensures that the client gets the preferred location.The target for both is to maximize the buying and selling experience for their respective clients.
Dual Agency: Pros and Cons
Apart from selling agents vs. listing agents in real estate agent types, the third angle in real estate transactions is the dual agency.
In this case, both the seller and the buyer are represented by the same agent. Alternately, two agents from the same brokerage can handle the deals of a buyer and seller.
Benefits of Dual Agency
Transactions are streamlined when one agent handles both the buyer and the seller. Documents are prepared and signed more efficiently. Since a single agent negotiates the whole deal, it is closed faster. By removing one agent from the deal, the whole process becomes seamless and efficient.
Further, the commission payable is slightly lower too. Typically, each agent in the usual mode charges about 3% of the selling price. But a dual agent will generally charge 5.0 to 5.5 percent commission.
Drawbacks and Legal Concerns
Dual agents cannot legally provide information to a buyer that a seller would not want to disclose. For example, a dual agent cannot tell the buyer if the seller is willing to accept a lower price.
A drawback is that dual agents receive a high commission which motivates them to close a deal quickly. Another problem is limited legal options as a single firm only would be sued if things go wrong.
Choosing the Right Agent for Your Needs
Choosing the right listing agent vs. selling agent scenario is vital to buying or selling a property. So, how to ensure that the right agent is selected?
Your search for a real estate agent starts with researching agents to shortlist a few prospective ones. You should browse websites or online profiles of agents to evaluate their experience, field of expertise, read customer reviews, and ask friends and colleagues for referrals.
Shortlist at least three agents to interview and evaluate whether one matches your needs.
Do not assume that any agent will represent your interests only. In a dual agency, your agent will represent the other side as well avoiding any legal responsibility.
Assessing Agent Expertise
Ask a few questions to assess agent expertise in this field.
- Is the agent licensed
- What experience and training has the agent gone through
- Does the agent close deals quickly
- Is the agent specialized in what you want like residential or commercial property?
- Will the agent provide client reviews and how are they
These points will help to establish agent expertise and professionalism
Essential Skills For Real Estate Success
Whether it is a selling agent vs. a listing agent, some skill sets are common among all agents.
Top real estate agents bring great negotiation skills to the table. They use market data to make their case, sweeten deals, and turn negatives into positives. Good negotiation means giving away something to get more in return for closing a transaction.
The real estate industry is always in a state of flux. Hence market trends cannot always be accurately predicted. At one time, there might be many homes on the market without enough buyers to raise prices for the seller.
The opposite is true also. An experienced real estate agent is aware of the current market trends, types of houses that are popular, and locations that are attractive to buyers.
Building trust and offering highly optimized customer service lies at the very foundation of the real estate industry. Successful real estate agents are open to communication, practice active listening, and meet clients and their needs whenever required.