Buyer’s Agent vs. Listing Agent: What You Need to Know
First-time home buyers aren’t typically versed in the intricacies of agency disclosure, nor do they understand the concepts of a buyer’s agent vs. listing agent. But a real estate agent’s loyalties and responsibilities change depending on the transaction and the client. Here’s a quick rundown of the different roles an agent can play in any one transaction.
The Buyer’s Agent
A buyer’s agent works with them for as long as it takes to make a purchase. They teach the buyers the market, show them lots of homes, and eventually advise when it comes time to make an offer and to negotiate with the seller. An invaluable resource, a buyer’s agent stands by the buyer’s side for the duration of their home search.
The Listing Agent
The listing agent, or seller’s agent, works for the seller and represents their interests in the sale. The seller hires their agent, typically with a written contract, to sell their home. The listing agent’s responsibility is to get the seller the highest amount of money in the shortest period. Their fiduciary goals and loyalty should be with the seller at all times.
The Dual Agent
Sometimes a buyer forgoes independent representation and chooses to work directly with the listing agent. This situation isn’t allowed in some states because of the conflict of interest. Where it is allowed, a dual agent represents both sides of the transaction at the same time.
In the case of a dual agent, it’s impossible for the agent to be completely loyal to either party. Both parties must agree to dual agency in writing, in advance.
Who Pays for the Agent?
The seller pays the listing agent’s commission when the deal closes. The listing agent then splits the commission with the buyer’s agent. A dual agent receives the entire commission.
Are Dual Agents a Good Idea, or a Bad One?
Unless you’re an experienced real estate investor, it’s best to stick with a buyer’s agent. There’s no cost. And a good buyer’s agent will provide an invaluable amount of advice and support in what can end up being a very stressful period.