If you're buying or selling real estate, it's essential to know what's going on, and who is representing you. This is where the terms listing agent and selling agent come in. What can be very confusing is that you might also come across terms like sellers agent or buyers agent. So what exactly is a selling agent, and what is a listing agent?
Although selling agents represent buyers, it's unusual for a buyer to hear their realtor call themselves a selling agent. This is because most prefer to use the term buyer's agent as it is somewhat more transparent, combined with the fact that they only become a "selling agent" once the transaction closes. Essentially, as their client is the one buying the property, they're getting credit for selling the home.
This terminology has more to do with attributing the closed sale, and knowing who listed the home and who brought the buyer. In the real estate world, you'll also see the terms listing broker and selling broker quite often, especially on lists of the top brokerages in a region.
Typically, the listing agent and selling agent will split the commission evenly. As the average real estate commission is around 5-6%, that means each agent will end up with a 2.5-3% commission. For example, let's say a house sells for $400,000, and the seller agreed to pay a 6% commission. That means both the listing broker and selling broker would be paid $12,000 or 3%. The listing agent would then earn a portion of that $12,000, based on their commission structure with their firm, as would the selling agent.
There are some cases where one agent might be paid more than the other, however. Sometimes, a seller might engage a listing agent for a fixed fee or a lower 1% commission. Some listing agents offer assisted-FSBO services, where they help a for sale by owner seller get the property listed on the local MLS.
Another instance where the agents might receive uneven pay is when the purchase works with a selling agent who offers a buyers agent rebate. In this scenario, the selling agent, aka the buyer's agent, will rebate a portion of their commission to the homebuyer.
While the majority of real estate deals have an agent representing each party, it is possible for the listing agent to work as a dual agent, where they represent both the seller and the buyer. Dual agency can create conflicts of interest, however, and is not always recommended. Any agent or broker that is a dual agent will also have to disclose the fact to each party. Another instance of dual agency is when the listing broker and selling broker are the same. This occurs when the listing agent and selling agent work for the same brokerage and is less likely to result in conflicts of interest.
So if a listing agent represents the seller and the selling agent represents the buyer, who pays the brokerage fees? Does the seller pay the listing brokerage, while the buyer pays the selling brokerage? To put it simply, no. The fees are typically paid from the listing agent's commission, which is then split with the selling agent. And while the seller has agreed to pay the commission, in many respects, the fees are actually paid by the buyer. This is because the buyer is the only party bringing money to the table, and it's that money that is going towards the brokerage fees.
In conclusion, if you are planning on selling a house and you decide to work with a real estate agent, you'll likely be engaging a listing agent, who will list, market, and sell your home. If, on the other hand, you're a buyer, you'll engage a buyer's agent, who will help you search for and view properties as well as assisting with negotiating a sale price and closing paperwork, among other things. Once you close on a home, your buyer's agent will be referred to as the selling agent for their role in selling the property.