When it comes to selling your house, it might seem like there are a lot of professionals involved. Each side of the transaction (i.e. both the buyer and seller) will have representation at every stage and it could be difficult to keep the parties, and who they work for, straight. Two professionals whose functions are important to distinguish are the buyer’s real estate agent and the seller’s.
They Work In The Interest Of Different Parties
The most basic difference between the buyer’s and seller’s agents is that they represent opposite interests. The buyer’s agent is responsible for making sure the buyer gets the best deal possible and the seller’s agent does the same for the seller. Sometimes the seller’s agent (also known as the listing agent) can also represent the buyer, but this is rare (and illegal in some states).
If you have asked the seller’s agent to represent you as the buyer, make sure you get a detailed contract stating exactly what their responsibilities are to each party. Usually, the seller’s agent has a fiduciary responsibility to the seller (meaning they are supposed to represent the seller’s financial interests) and if that’s the case, they can’t also represent your financial interests as they might be at odds.
All this being said, the skills required to be a buyer’s or seller’s agent are similar so agents often represent both parties, just in different transactions. Some will find they really enjoy working on one side of the transaction and will thus specialize. But don’t be alarmed if your seller’s agent has represented buyers before and vice versa.
They Have Similar Goals But Different Responsibilities
The buyer’s agent wants to help their clients buy the best home for the best deal and the seller’s agent wants to help their clients sell their home for the best deal. How they reach these goals is what sets their responsibilities apart.
Typical Seller’s Agent Responsibilities:
- Give seller an initial home consultation where they do a full walk-through and provide suggestions on how to clean, declutter, stage, and update to make the home more valuable.
- Provide seller with referrals for contractors to perform suggested updates.
- Help seller stage the property if they decide not to hire a professional stager.
- Hire a professional photographer to take photos of the property for marketing purposes.
- Place professional signage at the property.
- Help seller price home correctly to ensure it sells for the highest value in the quickest amount of time.
- Develop marketing materials and a professional website with a virtual tour using the professional photographs and often a video tour.
- Host open houses and private tours of the home.
- Ensure buyers are pre-approved for a loan.
- Attend home inspection and appraisal tours.
- Negotiate inspection issues with the buyer’s agent.
- Assist in solving any title issues.
- Assist in coordinating communication between the title officer, seller, and buyer so that there are no surprises at the closing table.
- Finalize loose ends before closing.
- Assist with the closing process by making sure seller has the correct documents and understands what they say.
- Ensure the correct signatures are in the right places.
- Earn between a 2.5% and 3.5% commission, depending on their agreement with the buyer’s agent (the seller usually pays a commission of 5% to 7%, which is then shared with the buyer’s agent).
How much do Realtors make on your transaction? It’s important to figure these costs into your calculations to determine how much a given offer will net you.
Typical Buyer’s Agent Responsibilities:
- Help buyers locate good sources for mortgage loans and assist them in getting pre-approved.
- Map active, under contract, and recently sold properties that meet buyers’ criteria to give them an understanding of the market. The idea is to show buyers in which neighborhoods these properties are located and how fast they sell so that they’re not caught off-guard when they make an offer.
- Make appointments to tour homes and drive buyers to these appointments.
- Advise buyers on the resale potential of the home.
- Help buyers analyze the price and value of a home before making an offer.
- Explain the standard offer form and provide advice on whether they should ask for further contingencies.
- Recommend trusted home inspectors and suggest additional inspections if they feel these are necessary.
Additional tests a buyer’s agents might recommend: testing for radon, lead paint, mold, and even a video scope of the sewer. These aren’t included in the traditional home inspection, but ordering these tests could save you from nasty and expensive surprises later.
- Attend inspection and appraisal tour and assist in interpreting results and negotiating inspection issues.
- Assist in reading necessary documents like HOA agreement, title commitments, etc.
- Assist in coordinating communication between the lender, title officer, seller, and buyer so that there are no surprises at the closing table.
- Monitor loan commitment and ensure buyer doesn’t do anything (like make a large purchase) right before closing that could endanger their funding.
- Assist with the closing process by making sure the buyer has the correct documents and understands what they say. Ensure the correct signatures are in the right places.
- Earn between 2.5% to 3.5% commission, depending on their agreement with the seller’s agent. You may ask who pays agent commissions: the buyer or seller? The seller usually pays a commission of 5% to 7%. The fee is then split with the buyer’s agent.
As you can see, the buyer’s and seller’s agents have different roles but similar goals. They both want the best deal for their client, they want the sale to close (otherwise they don’t get paid!), and they both want their clients to feel good about their experience so they will refer others to them. Educating yourself on their different roles can help you interview prospective agents and then decide who will give you the best service.