Published on: Mar 05, 2018 09:45:11
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; if anything there’s cooperation. Sure, each one of them has their own interest at play, but dividing to conquer is the way to the Real Estate Market podium.
First, let’s explain what is the role of a seller’s agent and that of a buyer’s agent. 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 house, 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. Money wise, it frequently is an even alliance. The person selling the house pays the commission predetermined on the Listing Agreement - usually between 5% to 6% of the sales price - to the listing agent, who splits it with the buyer’s agent. However, there are some cases where the person selling the house agrees to pay a 6.5% commission to be divided in 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 gloat in the end because he/she will have the bigger 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 buyer’s agent more quality of sleep and that’s worth a lot in the grownup world, right?
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 the 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. But because Phil is experienced, 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.
So, the truth is that even though a seller’s agent and a buyer’s agent are two very different things - because the real estate industry is an industry built on people and their relationship as much as it is an industry built around 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 are the ones benefiting the most by 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 property is transferred and you can finally lay down, take a deep breath and say: "Yup; it’s over, I won".