Listing Agents versus Selling Agents
You're out to buy a new home. You make a (wise) decision to enlist the help of a real estate agent ASAP. What kind of agent do you contact: a listing agent, or a selling agent?
There's only one right answer here: you contact a selling agent. Why? Because a selling agent, also known as a buyer's agent, contracts to represent the person or people looking to purchase a home. A listing agent, meanwhile, contracts to represent the person or people selling the home.
Because there are two parties involved in the transfer of ownership of a home-the party selling the home, and the party purchasing the home; there are naturally two real estate agents involved as well (most of the time).
The listing agent, sometimes referred to as a seller's agent, is typically a real estate agent working for a real estate firm. The listing agent can encounter his or her client in two ways. In some cases, the client will contact him or her directly in response to a print or web advertisement, a soliciting phone call, a word-of-mouth referral from a family member, friend or coworker, or some other method the agent has used to advertise his or her business. In other cases, the client will choose a reputable real estate firm, and a representative of that firm will assign an agent to work with that client.
Either way, the listing agent's main task is to market the property so as to attract potential buyers. The listing agent will use a variety of methods to arouse interest in the property. This agent's job is not so much to advertise to buyers as it is to advertise to selling agents who will bring buyers to the property.
To make selling agents aware of the property for sale, the listing agent might employ techniques such as:
· Setting up a 'For Sale' sign in front of the property
· Setting up a brochure box beside the sign containing flyers with further information about the home, and contact information
· Creating and distributing flyers containing a photo and information about the property
· Listing the home with the Multiple Listing Service, a database that makes a photo of and information about the property for sale accessible to all buyer's agents in the area
· Holding an office preview, in which all the selling agents of the office preview the property and decide how to best pitch it to prospective buyers
· Holding a broker preview, in which all the selling agents on the Multiple Listing Service are invited to preview the property and decide how to best pitch it to prospective buyers
· Holding an Open House so that selling agents can bring potential buyers to visit the property for sale
· Promoting the property at any meetings of any Realtor organizations to which they belong
Contrary to popular belief, the listing agent's duty is to their client, not their office. A listing agent is supposed to find a buyer for the property, but this doesn't mean that the buyer has to be represented by a selling agent from their office. That's why the Multiple Listing Service exists. All offices have access to the same database and, therefore, the same properties for sale. It often happens that a listing agent from one office markets the home, and a selling agent from another office finds a buyer. It doesn't matter who holds the actual contract with the seller of the property.
If you are a buyer, a seller's agent who speaks to you may request your signature on a statement proving that she disclosed her agency status to you. This is a disclosure, not a contract. However, as a buyer, you should never disclose confidential information to a seller's agent.
A listing agent has the following duties to the seller that he or she represents:
Getting the price and sales terms for the property wanted by the seller. Disclosing the same material facts necessary of a selling agent. Material facts refer to any problems a property may have, such as plumbing problems or other potential repairs NOT revealing personal information about sellers without their consent Selling Agents
Selling agents are often also called buyer's agents. Selling agents sign agreements to represent the buyer in a real estate situation, and to work in the best interest of the buyer.
Not all buyers choose to work with selling agents, but it is highly recommended. Why? Several reasons.
First of all, selling agents are well-educated about the real estate market. They should be able to tell you what types of properties are for sale, where they are located, and for how much. They can also provide you with all kinds of valuable information and statistics about the community into which you are hoping to move. Doing all that research on your own would take countless hours. Meanwhile, homes that are perfect for you might be getting snapped up by other buyers.
Second of all, you want to make sure that you are making appropriate financial decisions. What is the resale potential of your prospective home? Are you paying what it is actually worth? These are questions that a selling agent can answer for you.
Third, some listing agents and offices don't like to take offers directly from buyers. Since the seller is the one paying the commission, buyers tend to assume that, should a conflict arise, the agent will be on the seller's side. Many agents don't want to deal with this, so they may request that you find an agent to represent you. The last thing you need is to get caught in a situation where you've found the home of your dreams, but don't have an agent and the listing agent is unwilling to work for both sides. Sure, you can try and find an agent and make an offer, but what if while you're out agent-hunting, someone else makes an offer, and the seller accepts? There goes your dream home.
We suggest interviewing a few agents until you find one that you like. Once you've found a buyer's agent, he or she will likely ask you to sign a contract called a Buyer Agency Agreement. Nine times out of ten, your signature on this contract means that you have committed to working exclusively with that agent. See why it's so important to make sure you choose the right agent? However, agreements remain in effect for a period of time determined by the two of you. That length of time can be anything you both agree upon, from a few months to one day!
One important note about signing a Buyer Agency Agreement: Typically, you don't have to pay a fee to the agent. He or she gets his money from the seller, who pays your agent a portion of the commission fees at the closing of the deal. Sometimes, however, things work a little differently if you purchase a For Sale by Owner property. In this case, you may have to pay the agent a fee. Your signature on that contract means that you agree to pay that fee, so be sure to read your contract and clarify this with your buyer's agent before you sign.
Once you've signed, your buyer's agent has the following duties to you:
· Getting you the best possible price and terms on a purchase
Disclosing all material facts about the property, such as plumbing problems or any other possible problems and repairs the property may encounter Disclosing any personal facts that might lead to sellers being willing to negotiate a reduced price. These facts might include foreclosure, an impending divorce, or other personal situations. This way, you can rest assured that your agent is trying to get the best deal for you rather than the fattest commission for him or herself.
A final point to remember is this: previously, homebuyers disclosed all kinds of personal information to their buyer's agents. They felt at liberty to do so, because they figured the agent worked for them. This is true, but buyers often forget that real estate agents have to follow strict ethical codes, especially if they are members of the National Association of REALTORS®. These codes dictate that the buyer's agent must disclose certain types of information to the seller, as well.
Luckily, many states have taken measures in the form of laws to protect buyers, and to educate them on the specifics of the buying process. The majority of real estate agents are required by law to disclose whom they work for. The disclosure may occur at your first in-person meeting, over the course of a phone call, or via e-mail. However, this disclosure should always occur before the agent asks for any detailed information about your home desires.
Occasionally, an agent will represent both parties involved in the purchase/sale of a home. One situation where this occurs is when a listing agent markets a home, and is approached directly by a buyer presenting an offer (as opposed to having the buyer's agent representing the buyers present the offer). The agent may choose to work with both parties to close the deal. This type of agent is acting as a dual agent. However, this situation is not that common. Most agents prefer to focus on one side or the other during a sale. Some agents even specialize, and work exclusively with one side in all deals. Some real estate agencies go so far as to forbid dual agencies.
Dual agency also occurs when a Buyers Agent shows his or her client a property listed by his or her own real estate firm.
Keep in mind that dual agency is difficult for the agent to handle. He or she has duties to both parties involved. He or she cannot disclose personal information about either party. As well, before the buying/selling process even begins, the agent must disclose dual agency to both parties in advance. Both parties must agree, in writing, to the arrangement before any further steps can occur.