When buying or selling a home, the term “selling agent” can be a source of confusion. This professional plays a distinct part in the transaction, representing the interests of one party. Understanding their function is an important step in navigating the complexities of the real estate market.
The Primary Role of a Selling Agent
A selling agent is a licensed real estate professional who locates a buyer for a property and represents that buyer throughout the purchasing process. For this reason, the term is often used interchangeably with “buyer’s agent.” Their primary legal and ethical obligation, a fiduciary duty, is to the homebuyer. They are bound to act in the buyer’s best interests, ensuring they get the most favorable terms and price.
The selling agent’s focus is on the needs and goals of their buyer client. They are the buyer’s advocate, providing guidance, market expertise, and negotiation skills. Their relationship is established to help the buyer find a suitable property and navigate the steps from the initial offer to the final closing.
Selling Agent vs. Listing Agent
The distinction between a selling agent and a listing agent is fundamental to understanding a real estate transaction. The listing agent, also known as the seller’s agent, represents the property owner. Their main objective is to market the home effectively and secure the best possible price and terms for the seller. They enter the transaction by signing a listing agreement with the homeowner, giving them the authority to list the property for sale.
Conversely, the selling agent represents the buyer. Their goal is to help the buyer find the right property and purchase it for the best possible price. They enter the transaction when they are engaged by a prospective buyer to assist in their property search. While both agents work together to facilitate the sale, their loyalties are to opposite parties.
Key Responsibilities of a Selling Agent
A selling agent’s primary responsibility is identifying properties that match the buyer’s criteria and budget. This involves leveraging their knowledge of the local market and access to the Multiple Listing Service (MLS). They schedule property viewings, walk buyers through the homes, and point out both the strengths and potential weaknesses of each property.
Once a buyer decides on a home, the selling agent conducts a comparative market analysis to help determine a fair offer price. They then draft and submit the purchase offer and act as the primary negotiator on all terms, from price to contingencies. The agent works to protect the buyer’s interests, advising them on how to respond to counteroffers and potential issues that may arise from inspections or appraisals.
How Selling Agents Are Compensated
The compensation for a selling agent is based on commission, which is a percentage of the property’s final sale price. Historically, the total commission, around 5% to 6%, was paid by the seller from the proceeds of the sale. This amount was then split between the listing agent’s brokerage and the selling agent’s brokerage.
Recent rule changes have altered this traditional model. Now, buyers are more directly responsible for negotiating and paying their agent’s commission. These fees are established in a formal representation agreement signed before the home search begins. While sellers no longer directly pay the buyer’s agent through a commission split advertised on the MLS, the funds to cover the selling agent’s fee may still indirectly come from the seller in the form of concessions.
What is Dual Agency
Dual agency occurs when a single real estate agent represents both the seller and the buyer in the same transaction. This can also happen if two different agents from the same brokerage represent the buyer and seller. This arrangement creates a significant conflict of interest, as the agent cannot fully advocate for the best interests of either party, as their duties are divided.
Because of this inherent conflict, dual agency is illegal in some states and heavily regulated in others. In a dual agency situation, the agent must act as a neutral facilitator rather than a dedicated representative. This means they cannot provide the same level of advice or negotiation support that they would if they were representing only one client, which can be a considerable disadvantage for both the buyer and the seller.