Buyer's Agent/Seller's Agent
What is The Difference?
Until recently, the line separating a buyer's agent from a seller's agent was fine, indeed. In fact, the traditional buyer's agent (also called a sub-agent) has a greater legal obligation to an individual selling a property than the one trying to buy it. However, a new breed of agent has appeared on the market over the past several years, one committed exclusively to the best interests of the buyer.
The Buyer's Agent: A New Breed
Whether retained for a fee or paid a percentage of commission, this new breed of buyer's agent is contractually bound (for a negotiated length of time) to help clients realize the best possible price and terms when purchasing real estate.
While traditional sub-agents and their newest offspring are both responsible for viewing properties, evaluating neighborhoods and offering expert advice on services such as property inspection and mortgage lending, the advantages of contracting with an exclusive buyer's agent are readily apparent:
- Ability to disclose "inside" information about the seller's position that the sub-agent cannot legally divulge. Such information can benefit the buyer when making an offer to purchase real estate.
- The buyer's agent can work for the lowest sale price while the sub-agent legally cannot.
- Buyer will not be under pressure to purchase any particular property since all sales will be commissioned under terms of the exclusivity contract.
- The agent's expertise in real estate can help a client comfortably negotiate the purchase and sales process.
Despite such benefits, some experts still recommend using sub-agents, if only for the flexibility they afford. Since sub-agents do not work under contract, the buyer is free to work with a number of agents while property hunting. The sub-agent also has a leg-up in a hot real estate market thanks to a non-adversarial relationship with the seller's agent. After all, both are legally obligated to the selling party, and the selling party will ultimately decide which buyer prevails in a real estate bidding war.
Selling or Listing Agent
More straightforward is the selling, or listing, agent. Employed by a real estate firm, this agent works with the seller to establish an appropriate sale price for the home then markets that property, usually through a multiple listing service.
In any real estate office, each agent works hard to sell their company has listed properties and each is paid only if the home is sold, taking their commission on a percentage of the final sale. If the selling agent fails to produce a buyer for their client within the negotiated time frame, the seller may pull the property listing and contract with another real estate company.