Listing Agents and Selling Agents—What's the Difference?
These agents usually represent different parties int he transaction
Why would anyone care about the differences between a "selling agent" and a "listing agent?" Because you'll want to know what to call the respective agents in a transaction, particularly if you're selling or buying your first home.
This little piece of knowledge can provide you with a bit of confidence as you work your way through the process, and it's not difficult to differentiate between the two. Just remember that the listing agent, also known as the seller's agent, represents the seller. The selling agent represents the buyer, and is also known as a buyer's agent.
What's in a Name?
Much of the confusion between these terms stems from two and three letters—"er" and "ing." There are seller's agents, and there are selling agents, and no, they're not the same. They don't represent the same parties, although they do sound a great deal alike and they're easily confused.
A listing agent does what the name implies—she lists a property for sale. She works for the seller, and is sometimes also referred to as the seller's agent. It's her job to properly market the property and to get it sold.
A selling agent is the buyer's agent. Confusing nomenclature to be sure, but the "ing" puts him on the other side of the fence from the seller's agent. He brings buyers to the table. In this respect, he also gets a property sold.
Technically, this agent is called the buyer's agent before a contract is signed, and thereafter he's designated as the selling agent.
Do You Really Need an Agent?
Of course, you're free to sell your home on your own—FSBO. But unless you have a real knack for marketing and a bit of experience, you'll probably find that you'll do better with an agent.
And if you're the buyer? Some listing/sellers' agents won't accept offers from buyers themselves, but only from their representatives. They're concerned that they would otherwise feel a fiduciary duty to the buyer, the responsibility to protect that buyer's interests. And that can be difficult when they're technically representing sellers.
How a Listing Agent Is Compensated
Most transactions are completed under an exclusive representation listing agreement between the listing agent and the seller. But a listing agent might accept a small flat fee to act like a clerk and put a home for sale into MLS in a few isolated circumstances, yet not really represent the seller. Or the listing agent might execute an open listing with the seller, and the seller could also list with a variety of real estate agents, but this is uncommon.
The most common form of seller representation is when the listing agent has signed an exclusive right-to-sell listing with the seller. This means only the listing agent is entitled to a commission, or more accurately, the listing agent's brokerage is entitled to a commission. The brokerage then typically shares the commission with the agent.
Exclusive listings are bilateral agreements between a broker and a seller. Listings agents like to believe that the listing belongs to the agent, but the listing is actually not his property if he isn't the broker of the company. Listings belong to the broker or brokerage.
How a Selling Agent Is Compensated
Generally, the listing broker cooperates with another brokerage when that competitor represents the buyer. The listing broker pays the selling brokerage a portion of the earned commission in exchange for bringing a buyer if that buyer then submits an offer that the seller accepts. This is referred to as a "co-op" commission.
When the Listing Agent Is Also the Selling Agent
Although the listing agent is typically not the selling agent, this doesn't mean that the agent might not work in "dual agency" capacity as a selling agent as well. That selling agent could work at the same brokerage as the listing agent, or at a competing brokerage. A sale is referred to as dual agency when the selling agent works at the same brokerage as the listing agent, even if the listing agent and selling agent don't know each other.
A listing agent can also be a selling agent, which means that the listing agent is either engaged in dual representation, which is a form of dual agency and legal in some states, or the legal relationship between the parties could be transactional in nature only. Transaction agents generally can't represent either party and must remain neutral.
Sometimes buyers wrongly believe they can call the listing agent to show a home and that the listing agent will somehow get them a "deal" with the seller, either directly or indirectly. And there are indeed some unscrupulous agents in the industry who would love the prospect of earning a double commission—so much that they might do whatever it takes to appease the buyer by violating a fiduciary responsibility to either party. But most are ethical and won't work that way.