Where do their duties collide? Who’s got the most power? Can one agent act as both? Pick your side and place your bets; the real estate fight of the century starts now! Ok, now that we got you hyped up for some violence… sorry to burst your bubble, but the truth is that seller’s agents, and buyer’s agents are not enemies. There’s no fight and there is no buyer agent vs seller agent; if anything, there’s cooperation. Sure, each of them has their interest at play, but dividing to conquer is the way to the Real Estate Market podium.
Talking about a duel between the seller’s agent vs buyer’s agent can be pointless if you don’t know what they represent. Being a buyer’s agent or a seller’s agent is a job like any other, only this one is specific to the real estate industry. What is a buyer’s agent? In simple words, a buyer’s agent is a real estate professional that guides a home buyer through the process of purchasing a home. This agent represents the home buyer.
On the other hand, we have the seller’s agent, also known as the listing agent, who represents a home seller in a real estate transaction, and helps them sell their house. If you are thinking about becoming a listing agent or a buyers agent, that is a whole different story that deserves a blog of its own.
Here is where things get interesting! The home buyer and seller are connected through the agents that represent them. Therefore, people assumed a collision between the buyer’s agent and the seller’s agent in the form of a real estate fight. We know that there is no actual fight but rather a form of cooperation that leads to the success of the transaction and, ultimately, to the success of both agents.
The things that differentiate the seller’s agent and buyer’s agent comes in the duties they perform. Here is the difference in the duties performed by the buyers agent vs sellers agent.
A seller’s agent and buyer’s agent are two terms that are often interchangeable, and that may be confusing at some point. You were expecting a duel between the two, and it turns out that they are one and the same? Now that would be a great plot twist for a movie, but not in real estate. The truth is that the seller’s agent can be associated with the buyer’s agent in certain scenarios.
If the homebuyer decides to purchase one of the homes presented by the buyer’s agent, a contract is signed, and the agent can be designated as the seller agent because he helped sell a property. This situation might confuse many people, and as such, calling the seller’s agent, a listing agent sorts that issue. In order to point out the key differences between the two agents, it is essential to know what duties each type of agent has to carry out.
Let’s explain the role of a seller’s agent, and that of a buyer’s agent is. Say you’re selling a house. You used The OFFICIAL Real Estate Agent Directory® and found Agent Susan. You talked to her, she saw your home, gave several tips on how to raise the Fair Market Value of it and she was really comprehensive, creating a plan to sell your house. She’s amazing, so you hire her and now you’re selling a house together. Agent Susan is your selling agent. Two months later, when she was hosting one of her amazing Open Houses filled with Scents that Attract Home Buyers and other time-tested tactics, Agent Susan was approached by a slick young man. He says: “Hey, I’m Agent Ted. I’m representing this family buying a home and this house is perfect for them! Wanna do business? Let me follow you on Instagram and I’ll DM you with the e-vite to further discuss this on a Skype call, ok?”. Aside from being a Social Media Savvy Agent, Agent Ted, in this situation, is the buyer’s agent.
So, basically, a seller’s agent represents the person selling a house and the buyer’s agent represents the person buying a home. The former, also known as “listing agent”, is the one responsible for preparing, listing and marketing the house for sale. The latter is the one who searches the Multiple Listing Service (MLS) for houses and approaches the seller’s agent to negotiate and make an offer on behalf of his/her clients that hopefully will be the ones buying the home.
Ok, but you sold me a fight; now I want one! Who’s the most powerful in that relationship?
Well, it depends. Moneywise, it frequently is an even alliance. The commission paid by the home seller is predetermined on the Listing Agreement - it is usually set between 5% to 6% of the sales price - to the listing agent and the commission is split with the buyer’s agent. There are some cases where the person selling the house agrees to pay a 6.5% commission to be divided into a 3.5% share for the listing agent and 3% to the buyer’s agent. So, points for the seller’s agent, I guess?
But, if you think about how agents represent their client’s best interests on a fight of “lower price” versus “higher price”, buyer’s agents can have their revenge because, ultimately, the one with the biggest stakes at play is often the home seller, right? Especially in a Buyer’s Market, the buyer’s agent is likely to boast in the end because he/she will have the more significant leverage to get better deals for his/her clients buying a home. He/She could make the home seller include the Closing Costs on the final price of the house, for instance. Making sure his/her clients are not Experiencing Buyer’s Remorse provides the buyer’s agent more quality of sleep, and that’s worth a lot in the grownup world, right?
If you had to choose between being a seller’s agent or a buyer’s agent, what would you choose? In both cases, the agents face particular challenges, and each job comes with benefits and downsides. As a buyers agent, you might have to deal with buyers that lose their luster fast, and after a couple of work hours spent on potential buyers that end up placing offers to FSBO homes without the agent, it can get frustrating. A situation like this is easily avoidable on behalf of the seller’s agent because a listing agreement is signed, and the home seller is legally bound through the document.
However, the security of a contract doesn’t ensure the security of a sale, especially if the home is overpriced, or if you are looking at a buyer’s market. The commission might not be the only win that an agent gets out of a successful real estate transaction. Getting more leads and having customers that walk out satisfied with their transaction will lead to more sales in the future. Be sure that if those clients get in the real estate market again for another real estate transaction, you will be the first person they get in touch with. That counts as a win too.
The funny thing about this “fight” is that, although there are some agents that specialize in one of those definitions, being a seller’s agent or a buyer’s agent is just a matter of timing. In another situation, Agent Ted can also act as a seller’s agent and Agent Susan as a buyer’s agent. There are even occasional moments when an agent can act as both! It’s what we call a Dual Listing.
Let’s paint a scenario: Ever since he was a kid, Home Buyer Terry has always dreamed of buying a home just like the one right across the street. It’s a big Civil War-era home with a big porch, attic, basement, and even a greenhouse! Home Buyer Terry reaches out to Agent Phil, one of the best agents in Texas - where he lives. A year passes by; Agent Phil hasn’t been able to find Home Buyer Terry houses as perfect as the one across the street. In comes Home Seller Grettel. She is a 90-year-old lady interested in selling a house because she decided to finally fulfill her lifelong dream of leaving Texas to live in Hawaii. God bless Home Seller Grettel. She reaches out to Agent Phil, and he agrees to represent her. When he heads to the front lawn of the Home Seller Grettel’s house to put the “For Sale” sign, he bumps into Home Buyer Terry, who says, “Wait a second: you’re representing Neighbor Gretta’s house?! That’s my dream house! Please, make her an offer on my behalf! Whatever she wants!”
Agent Phil finds himself in a dual listing, where he is both the seller’s agent and the buyer’s agent. Because Phil has experience in real estate, he knows that he needs to have the consent of both his clients regarding him representing both, because a dual listing occurring without the knowledge of both the home seller and the home buyer might create a conflict of interest and violate the principal fiduciary relationship between an agent and a client, which is illegal. But if Grettel and Terry are ok with it and put that in writing, then the dual listing is on.
Even though a seller’s agent and a buyer’s agent are two different occupations - because the real estate industry is built on people and their relationship as much as it is an industry built around the property and its ratio of supply and demand - the real winner here is - plot twist! - you!
Yes, you, the home seller or home buyer. Both of you benefit the most from this friendly competition between seller’s agents and buyer’s agent. In the end, their dispute is what provides you the best of prizes: that moment where the title of the property is transferred and you can finally lay down, take a deep breath and say: "Yup; it’s over, I won.”