This little piece of knowledge can provide you with a bit of confidence as you work your way through the process, and it’s not difficult to differentiate between the two. Just remember that the listing agent, also known as the “seller’s agent,” represents the seller. The selling agent represents the buyer and is also known as a “buyer’s agent.” Learn more about the roles these agents play in real estate so you can be a more informed buyer and seller.
Seller’s Agent vs. Selling Agent
A seller’s agent and a selling agent don’t represent the same parties, although they sound a great deal alike and are easily confused. Seller’s agents do what the name implies—they list a property for sale. They work for the seller and are also referred to as the “listing agent.” It’s their job to market the property and get it sold properly. A selling agent is a buyer’s agent. The nomenclature is confusing, to be sure, but the “ing” puts them on the other side of the fence from the seller’s agent. They bring buyers to the table. In that respect, they also get a property sold.
Do You Really Need an Agent?
Of course, you’re free to sell your home on your own, which is known as “for sale by owner” (FSBO), but unless you have a knack for marketing and a bit of experience, you’ll probably find that you’d do better with an agent. And if you’re the buyer? Some listing/seller’s agents won’t accept offers from buyers themselves, but only from their representatives. They’re concerned that they would otherwise feel a fiduciary duty to the buyer, which is the responsibility to protect that buyer’s interests. That can be difficult when they’re technically representing sellers.
How a Listing Agent Is Compensated
Most transactions are completed under an exclusive representation listing agreement between the listing agent and the seller. But a listing agent might accept a small flat fee to act as a clerk and put a home for sale into MLS in a few isolated circumstances, yet not really represent the seller. Or the listing agent might execute an open listing with the seller, and the seller could also list with a variety of real estate agents, but this is uncommon. The most common form of seller representation is when the listing agent has signed an exclusive right-to-sell listing with the seller. This means only the listing agent is entitled to a commission, or more accurately, the listing agent’s brokerage is entitled to a commission. The brokerage then typically shares the commission with the agent. Exclusive listings are bilateral agreements between a broker and a seller. Listings agents like to believe that the listing belongs to the agent, but the listing is actually not their property if they aren’t the broker. Listings technically belong to the broker or brokerage.
How a Selling Agent Is Compensated
Generally, the listing broker cooperates with another brokerage when that competitor represents the buyer. The listing broker pays the selling brokerage a portion of the earned commission, in exchange for bringing a buyer, if that buyer then submits an offer that the seller accepts. This is referred to as a “co-op commission.”
When the Listing Agent Is Also the Selling Agent
Although the listing agent is typically not the selling agent, this doesn’t mean that the agent might not work in a dual agency capacity as a selling agent as well. That selling agent could work at the same brokerage as the listing agent or a competing brokerage. A sale is referred to as “dual agency” when the selling agent works at the same brokerage as the listing agent, even if the listing agent and selling agent don’t know each other. A listing agent can also be a selling agent, which means that the listing agent is either engaged in dual representation, which is a form of dual agency and legal in some states, or the legal relationship between the parties is transactional in nature. Transaction agents generally can’t represent either party and must remain neutral. Sometimes, buyers wrongly believe that they can call the listing agent to show a home and that the listing agent will somehow get them a “deal” with the seller, either directly or indirectly. And there are some unscrupulous agents in the industry who would love the prospect of earning a double commission so much that they might do whatever it takes to appease the buyer by violating their fiduciary responsibility. Most are ethical and won’t work that way, however.
