Can somebody please explain the difference between listing agent/seller agent
transactional agent/buyer’s agent?
Can one agent represent both sides? How’s the buyers’ agent get’s paid? What is a regular commission for selling agent? And does it make sense to approach listing agent without your own agent to cut cost of the house or will the listing agent simply keeps full commision amount in that case?
Please note… information for your area may be different but here in St. Louis… this is how it works.
Listing Agent & Sellers Agent are the same thing. They represent the seller and their main objective is to sell the house for the highest list price in the least amount of time. The listing/seller’s agent represents only the seller and the seller’s best interest.
Buyers Agent - this is the agent that represents the buyer in the transaction and works the deal to the buyers best interest. The buyers agent is paid from the listing agent’s commission agreement with the seller. Example: Listing agent gets a 7% commission to sell the sellers house. Listing agent then splits that commission with the buyers agents. In my example the listing agent receives 4% and the buyers agent receives 3% but these can be any percentage that the listing agent chooses.
Transactional Agent - this is an agent who represents THE TRANSACTION. He/she cannot take sides and cannot give advice on how to negotiate the deal. He/She basically completes the forms & necessary paperwork and is typically paid by both the seller and the buyer. Transaction Agent & Transaction Broker are synonmous with each other.
Can an agent represent both sides? Yes, but it gets messy. The agent is then known as a Dual Agent (in the state of MO). Being a dual agent is similar to being a transaction agent. They can not negotiate the deal only present to you what the other side has decided.
You should contact an agent in your area to discuss normal commissions for that area. Commission structures vary greatly from state to state and even city to city within the same state.
Does it make sense to contact the listing agent hoping for a cost cut? Depends how well you sleep at night knowing the agent is working for the seller and not you. Some agents will not cut commission and keeps the full amount regardless of the cost cut on the house, if any.
Always remember, THE SELLERS AGENT/LISTING AGENT ALWAYS WORKS FOR THE SELLER!
GET YOUR OWN AGENT! The representation laws are different for each state, so be sure to talk to an agent in your area and ASK A LOT OF QUESTIONS! Don’t be afraid to sign a buyers agency agreement (a representation agreement) with your own real estate agent. It’s a safety precaution for making sure your best interests are always put on the bargaining table!
Thank you so much! I am much more clear right now. One more question:
What happens if the selling agent represents lender owned property? Does it mean that the selling agent gets to keep all 6-7% even if I don’t have my own agent?