Real estate terminology can sometimes be confusing. Perhaps some of the most confusing terms are those that describe the role of agents and brokers in the real estate sales process. Let’s look at two of the most commonly used and misunderstood terms – listing agents and selling agents.
When we sell our home (or other property), we typically seek out a licensed real estate professional to “list” our home on the local Multiple Listing Service (MLS). The term “list” is an action verb that has its roots in the practice of adding our home to a list (noun) of properties for sale by the broker we hired. Many years ago, the list became “multiple” when brokers began combining their lists (also called “listing books”) with those of other brokers to maximize exposure of all properties available for purchase in the area. This central database went from being a folder full of flyers to a computer printout and, eventually, to the full featured online property search system that we have today. Although listing systems have greatly improved, the “listing agent” remains the real estate professional hired to list our property on the MLS, market our property, field offers and manage the escrow closing process.
So… is the listing agent selling your home? In most instances, no. The listing agent markets the property to other agents and to the general public through their real estate marketing program. So… who is selling the home? Agents who show the property to potential buyers and submit their offers are selling the property and are the “selling agent,” also frequently called a “buyer’s agent.”
Could the “listing agent” also be the “selling agent” in a particular transaction? If seller and buyer agree, one agent could represent both in an arrangement called “dual agency.” Because substantial conflicts of interest could arise in dual agency, it is not legal in all states, though it is legal here in my home state of California. The most significant risk in dual agency transactions is loss of competitive advantage: an agent cannot say to the seller “I will get you the highest price” while at the same time promising the buyer “I will get you the lowest price.” If a dual agency situation is unavoidable, buyer and seller should ask the agent to provide in writing which services they modify or no longer provide in a dual agency situation.
Finally, are listing agents always listing agents and are selling agents always selling agents? Within the confines of a specific transaction, yes, but generally real estate professionals will work with either buyers or sellers. That said… some agents specialize in working with either buyers or sellers and there are even some who work exclusively with either buyers or sellers.
I hope you found this explanation of real estate terminology relating to listing agents and selling agents helpful. If you have questions about agents or real estate buy/sell/investment strategies, drop me a line! Contact Us