Listing Agents: What Buyers and Sellers Need To Know
Most people go into the home buying process knowing they’ll need to deal with real estate agents. But things can get confusing when different types of agents come into play, like listing agents, sellers agents and so on.
We’ll explain what a listing agent does and how both buyers and sellers should approach their interactions with them, respectively.
What Is a Listing Agent?
A listing agent represents the person or party selling a property. They’re called listing agents because they usually handle “listing” the property on the multiple listing service (MLS) and other online platforms. They’re also commonly referred to as seller’s agents.
Listing agents will also advise the seller on the price point they should list the home. This is important because the listing price serves as the starting point for negotiations. If the price is set too high relative to the market value, the home may sit without attracting offers. If the price is set too low, the seller might not get the full value of the property.
Listing Agent vs. Selling Agent
There are multiple interested parties in any real estate transaction, but structurally, two have the most adversarial relationship: the buyer and the seller. By nature, the buyer usually wants to buy the home for the lowest price, while the seller wants to sell for top dollar.
Listing agents negotiate on behalf of the seller to help them achieve their goals. Selling agents, also known as buyer’s agents, attempt to help the home buyer achieve the best possible deal.
- Listing agents – aka seller’s agents – help the home seller.
- Selling agents – aka buyer’s agents – help the home buyer.
One of the most confusing pieces of this is the fact that “seller’s agents” represent the seller, while “selling agents” represent the buyer.
Our best advice is to remember that “seller” is a person being represented, while “selling” is an action being taken. Seller’s agents represent the seller, while the selling agent “sells” the buyer on the idea of the home. (To be clear, we’re not defending the jargon, just trying to help you understand.)
If you’re still confused, you can always play it safe by using “listing agent” and “buyer’s agent.”
Dual agency is the term for when one real estate agent represents both the buyer and the seller in a real estate transaction. We recommend avoiding this situation because it’s impossible for one agent to fully represent two parties who have conflicting interests.
In other words, the listing agent shouldn’t be the same person as the buyer’s agent. The practice is actually illegal in some states.
Listing Agent Responsibilities
Because listing agents represent the person selling the home, their duties are focused on helping the seller. Here’s an overview.
Evaluate the property
Listing agents will assess the market to get an idea of the home’s value. They’ll also advise the seller on any home improvements or renovations that should be done before listing the home. They’ll use this analysis to provide guidance on the listing price.
Listing the property
The final phase of this step is seeing the listing go live on the MLS and other online platforms. But before that, the listing agent will do tasks like write descriptions highlighting the strengths of the property, stage the home and coordinate professional photographs.
The listing agent will be responsible for getting the word out about the property. In addition to marketing it through traditional channels, they’ll also do things like host open houses and set up virtual tours.
Point of contact
For inquiries about the home, the listing agent will serve as the primary point of contact. They should handle all communication with interested parties, from prospective buyers to buyer’s agents. They’ll also communicate feedback that comes from open houses.
The listing agent will handle negotiations regarding the property. They’ll present offers to the seller and advise them on which ones are the strongest. They’ll also handle any back-and-forth between the buyer and their agent.
There are a lot of steps that go into closing, from the home appraisal to the home inspection. The listing agent will be the seller’s representative throughout this process, providing the seller with necessary updates and advocating on their behalf when interacting with other parties. They’ll also review all documents for accuracy during the process.
How do listing agents get paid?
Listing agents get paid a commission, which means they’re paid when the property is sold. Traditionally, the seller pays the listing agent’s commission, which is calculated as a percentage of the sale price.
The buyer’s agent also gets paid a percentage of the sale price, which the seller normally covers. The total cost for the commission of both agents usually ranges between 5% and 6%. It’s common to see the commissions divided unequally. For example, the listing agent receives 3%, while the buyer’s agent receives 2.5%.
However, all of this is up to negotiation. It’s possible for the buyer to pay the listing agent’s commission instead.
Listing Agents From a Seller’s POV
Because listing agents represent the seller, they’re usually more important to the seller than they are to the buyer. After all, they’ll be your partner and advisor throughout the selling process. Here are some things for sellers to keep in mind with regard to listing agents.
Benefits of using a listing agent
It’s possible to list your home as for sale by owner (FSBO), but that may not be the best option for many sellers. Below are the benefits you’d miss out on:
It’s a listing agent’s business to know exactly what’s going on in their real estate market day in and day out. They can leverage that expertise to advise you on everything from what price point to list your home to which renovations you can skip versus which ones might be necessary.
Listing agents have access to the MLS, an important place to list your home. They can also help you professionally stage and photograph your home, which can lead to more interest compared to you taking photos with your smartphone. They can also reach out to their professional network to see if any of their colleagues are representing buyers who might be interested in your home.
The negotiation process can get emotional. A professional who can review all of the offers and remain level-headed during negotiations is an advantageous partner to have in your corner. Even after an offer has been accepted, they can be invaluable when it comes to navigating the back-and-forth with items like the home inspection or any other contingencies.
A lot of preparation goes into selling your home. Add on the communication necessary with different parties, and it can feel like a full-time job. Having a listing agent take things off your plate can save a lot of time and stress during this process.
Tips for finding a listing agent
Finding the right real estate agent is one of the most important decisions you’ll make when it comes to selling your home. Here are some hard-won pearls of wisdom to help you:
- Ask for referrals: Friends and family might know somebody who would be a great fit. If the people you trust the most have a name in mind, it’s worth taking the time to at least meet the person.
- Attend open houses: There’s nothing like seeing a professional in their element. If you attend an open house, you can see how a listing agent interacts with prospective buyers and get a sense for whether or not you like how they represent themselves and the property.
- Talk to multiple people: Even if you think a candidate is fantastic, it’s worth taking the time to interview multiple real estate agents. It’s a general best practice and will also help you become more informed about the real estate market in your area.
- Choose a matching communication style: Some people prefer to over-communicate with their agents, while for others, less is more. Some agents prefer to text, while others like to call. Convey what your communication expectations are upfront and make sure to pick someone who meshes well.
When you do choose your listing agent, you’ll need to sign a contract before they can represent you and the property. Make sure to do your due diligence before committing to an agent.
Can you move on from a listing agent?
The simplest way is to let your contract expire without renewing. These arrangements usually last 30 – 90 days, although they can be longer. Make sure to confirm the length before signing.
The biggest disadvantage to switching agents – apart from finding a new one – is that it extends the length of time your house will be listed as active on the MLS and online home-selling sites. If a property sits for too long, it can create a negative impression in the minds of buyers.
Listing Agents From a Buyer’s POV
When prospective buyers look at homes listed online, they’re likely to see the listing agent’s contact information. But if you’re a first-time home buyer, it’s not immediately clear how communication is supposed to work, especially if you have your own real estate agent.
Should a buyer interact with a listing agent directly?
There’s nothing stopping an interested buyer from reaching out to a listing agent directly to try and set up a tour of the home or ask them questions. In fact, during open houses, the listing agent will usually be there to answer any questions about the property.
Just remember, the listing agent’s obligation and loyalty are to the seller. So any information you give them could be used against you. It’s a little like speaking with another team’s coach. Confiding strategy in them isn’t at all advisable.
We recommend finding a real estate agent who will look out for your interests. Generally, it’s best to let them handle communication with the listing agent. They can also reach out about setting up private showing times for the home if that option is available.
Questions buyers should ask listing agents
Regardless of whether or not an agent represents the buyer, there are some questions they should ask the listing agent, either through their own agent or directly.
- Seller motivation: Why is the seller putting their property on the market? What’s their timeline? This information can help inform your offer.
- Property details: This is particularly useful if you notice something while touring the property. Asking the listing agent about it can provide context that can reduce anxiety around yellow flags – or escalate them to red flags.
- Offers and deadlines: You can ask if there have been offers on the property. It’s also important to know if there are any deadlines for when an offer needs to be submitted.
While buyers should take what a listing agent says with a grain of salt, you usually don’t have to worry about them lying outright – especially if they’re a Realtor®. A Realtor® is a licensed member of the National Association of REALTORS® (NAR). They’re bound by a code of ethics that prohibits lying. It’s also against the law to lie when it comes to property disclosures.
Final Thoughts on Listing Agents
Ideally, if you find a great real estate agent, you’ll build a relationship that lasts through multiple properties. They may be a buyer’s agent for you and help you purchase your first home, then become your listing agent when it’s time to sell.
Whichever side of the transaction you’re on, remember that it helps to have a professional dedicated to your best interests.
- A listing agent represents the person or party selling a property. A selling agent or buyer’s agent represents the buyer
- Listing agent duties include market evaluation, staging, listing, marketing and negotiating to name a few. Traditionally, they’re paid a commission by the seller when the home sells
- Buyers can interact with listing agents directly, but keep in mind they have the seller’s best interests in mind. We recommend communicating with them through a buyer’s agent
National Association of REALTORS®. “Agent Income.” Retrieved August 2023 from https://www.nar.realtor/agent-income