Learning about the various aspects of a listing agent before finding one is key.
Why?
Because it provides clarity when making certain decisions throughout the home selling process.
And it can be the sole reason for a real estate transaction that exceeds your expectations.
Here’s everything you need to know about a listing agent in real estate.
What is the difference between a listing agent and a selling agent?
The primary difference between a listing agent and a selling agent lies in whom they represent in a real estate transaction.
A listing agent, also known as a seller’s agent, represents the seller of the property.
A selling agent, commonly referred to as a buyer’s agent, represents the buyer.
These terms can get confusing because consumers often refer to a “selling agent” as a real estate agent who represents the seller, whereas real estate professionals utilize “selling agent” to describe the agent who represents the buyer.
While both types of agents work in real estate transactions, their obligations and focus are aligned with different parties –– one with the seller and the other with the buyer.
What does a listing agent do?
The ultimate job of a listing agent is to sell a house for the best price and terms.
And in the shortest amount of time possible.
In order to accomplish that, they must successfully execute numerous tasks.
Understanding what these tasks are will give you a sense of what to expect from your realtor when selling.
Here are some of the most important things a listing agent does for a seller:
Conduct a comparative market analysis (CMA): Real estate agents perform a market analysis to determine the optimal listing price of a property they’re going to sell. They conduct this analysis based on comparable properties and local market conditions.
Offer guidance on required disclosures: A listing agent has the responsibility to inform a home seller about the necessary disclosures required by law in their jurisdiction. They are also tasked with assisting the homeowner in preparing these documents.
Advise on home preparation: They provide home preparation guidance, such as decluttering, staging, and making necessary repairs or improvements.
Execute a marketing plan: Listing agents are responsible for producing a marketing plan, using strategies like professional photography, custom videos, social media promotion, their network of other real estate professionals, and more.
Manage showings and open houses: They coordinate showings with buyer agents and manage open houses, while ensuring the home is presented in the best possible light to prospective buyers.
Reviewing, negotiating, and facilitating offers: A seller’s agent reviews, negotiates, and facilitates offers on behalf of their clients. Their responsibility lies in streamlining the offer process and providing expert advice to help sellers make the best decision when responding to a buyer’s offer.
How much does a listing agent cost?
Listing agents typically earn a commission based on a percentage of the home’s final sale price.
This amount is usually deducted from the seller’s proceeds at closing.
Here’s how it works…
The average commission percentage a seller pays is 5-6% of the final sale price (what’s considered “standard”).
But that total doesn’t go directly to your listing agent.
It’s typically split between your agent and the buyer’s agent and is paid to the company each agent works for (this is spelled out in the agreement you sign with your agent).
Each real estate agent will then get a percentage of the amount paid to their brokerage (company).
For example, let’s say the total commission is 5%.
Usually, 2.5% will be paid to your listing agent’s brokerage and 2.5% to the buyer’s agent’s brokerage.
Your agent gets a portion of that 2.5% from the agency they work for.
It’s not uncommon for an experienced listing agent to make around 90% of that amount.
Real estate agents with less experience or a lower transaction volume will typically make 50-80%.
And something to keep in mind…
There’s no fixed rule about the percentage to be paid –– so you can negotiate the commission with a listing agent.
But you should consider the following factors when deciding how much to pay a realtor:
- Experience
- Marketing plan
- Overall service
- Availability
- Negotiating skills
- Reputation
- Integrity
All of these have a direct impact on the results your agent will achieve for you.
Benefits of selling with the right listing agent
The right listing agent can yield you serious benefits.
“Right” is the important word there because not all listing agents will give you the same advantages.
Here are some of the most notable benefits of partnering with the right listing agent:
More exposure for your home: An accomplished real estate agent can help you reach a broader audience of potential buyers. They do this by implementing an extensive marketing plan to maximize the exposure of your listing, which can help you sell faster than you would with the average listing agent.
The right list price: An experienced (and trustworthy) listing agent will help you set the right asking price to avoid over or underpricing your home.
Less stress: A real estate agent who has a well-established selling background and the capacity to prioritize your sale can alleviate stress throughout the entire process. They do this by providing support and addressing concerns before they become an issue.
A higher sale price: A listing agent with a reputable track record who has expertise in pricing, marketing, and negotiating can get you a higher sale price, maximizing your net proceeds.
Expert guidance: A knowledgeable agent has a deep understanding of your local real estate market, pricing strategies, and industry trends. They use this expertise to effectively guide you in making informed decisions.
Legal and regulatory knowledge: Experienced real estate agents are familiar with the legal and regulatory requirements surrounding property sales in your area, helping you maintain transparency and avoid potential issues with buyers.
7 key qualifications of a good listing agent
Some homeowners consider a “good real estate agent” to be one with a higher number of sales compared to other real estate agents.
While this can be a helpful measure, our definition of a good listing agent goes beyond the number of homes an agent has sold.
Why?
Because not all experienced listing agents will care about helping you achieve the best results.
Here are the seven key qualifications that we believe define a good listing agent.
Relevant selling experience: Real estate agents who have sold similar properties in your area and near your price range will have a better understanding of how to make your home stand out from other nearby homes for sale.
A good listener: The listing agents who care will listen before speaking. They’ll inquire about your goals and concerns to formulate a selling plan that meets your needs.
Prioritizes a seller’s best interests: Putting a client’s interests before their own is the most important qualification of a listing agent –– because the agents who don’t can literally cost you tens of thousands of dollars without you even knowing (more on this shortly).
A reputable track record: An agent with a strong reputation will have past clients who use descriptive language to advocate on their behalf. These agents are much more likely to be reliable and provide great service.
A strong marketing plan: A skilled listing agent will have a comprehensive marketing strategy to maximize the reach to prospective buyers. And that strategy will be tailored to your property and your ideal homebuyer.
Negotiation skills: Listing agents who excel at negotiating know what to say and when to say it when advocating on behalf of a home seller. These are the real estate agents who can get a better price and terms when hammering out an offer with buyer agents.
No contract commitment: Being able to cancel the agreement you sign with a listing agent before its expiration date (without owing any commissions) demonstrates confidence in their ability to deliver results. This is why we include it as part of our agent screening process when matching a seller with a top listing agent in their area.
Selecting a listing agent
As with any profession, there are some who excel at what they do and others who don’t.
It’s no different with listing agents.
The right one can transform the entire selling process into a rewarding journey.
Here are a few important things you should consider before deciding which listing agent you’re going to select.
You can visit our deeper discussion about how to choose the right realtor for selling to be confident you are making the right decision.
Understand which listing agents to stay away from
Want to multiply your chances of selling your home for the best price?
Then hire a listing agent who has a history of prioritizing a seller’s best interests.
How do you do that?
Make sure your real estate agent has a lower-than-average dual agency rate (the percentage of their sold listings where they represented the seller and buyer in the same transaction).
This is a key indicator of which agents prioritize earning two commissions from one transaction –– and which ones don’t.
The agents who have a lower-than-average percentage compared to other listing agents in your area are much more likely to net you the highest price.
And less likely to use deceptive tactics commonly seen in real estate.
The maximum percentage will depend on your price range –– so your location matters.
But generally, a listing agent who has a dual agency rate of 10-15%, or higher, is someone you should avoid working with.
Compare listing agents online
Assessing prospective listing agents online allows you to scrutinize various key attributes that your agent should possess.
Pay attention to these three things when evaluating an agent:
Reviews: A good agent will have past clients who vouch for them. Look at the descriptive language used by former selling clients and when those reviews were posted.
Listing sold: Recent selling experience is more telling than the number of years as a real estate professional. Research the agent’s sales history where they represented the seller.
Price range expertise: Agents who primarily sell in higher or lower price ranges may not have the expertise or motivation you want in a listing agent –– so take note of their price range expertise.
Interview listing agents before choosing one
Choosing which agent to work with will be the most important decision you make when selling your home.
Because that person can have a direct impact on how much you sell for and how fast.
So make sure they’re the right fit.
How do you do that?
Conduct an interview before you make your decision –– even if they were referred to you or if they’re someone you know.
But an interview doesn’t just mean meeting in person.
The key is compiling a list of the right questions to ask a realtor when selling.
The listing agent agreement
Understanding the agreement you sign with your agent is imperative.
Why?
Because some agents will use it to their advantage.
But knowing what you’re signing can also save you from potential misunderstandings.
Here are some of the important details you should be aware of when discussing the listing agreement with your agent.
Exclusivity clause: Most listing agreements are an “exclusive right to sell,” meaning the agent you hire has exclusive rights to sell the property (and earn a commission). Understanding the exclusivity clause can help you avoid inadvertently violating any terms, which could lead to additional fees.
Agent responsibilities: Reviewing your agent’s responsibilities helps set clear expectations and prevent conflicts. It also confirms that your agent’s duties match your needs.
Seller responsibilities: Your listing agent isn’t the only one who has responsibilities. Make sure you fully understand your obligations as outlined in the agreement.
Commission rate: Look at the total commission listed in the agreement and the percentage being paid to the buyer’s agent. If the percentage to your agent is more than the percentage for the buyer’s agent, then you’ll want to confirm why.
Representing both parties: Be aware of the implications outlined in the agreement if your agent also represents the buyer. A dual agency transaction presents a conflict of interest, so understanding how your agent’s duties can change is critical.
Contract length: The typical listing agreement is valid for 6 months (negotiable), but the length varies based on local market conditions and the type of property you’re selling. Ensure you’re comfortable with the agreed-upon timeframe.
Cancellation clause: Having the option to cancel isn’t typical, but it allows you the flexibility of terminating the contract if you’re dissatisfied with your agent’s performance.
Tips for collaborating with your listing agent
Don’t think of working with a listing agent as a one-sided relationship.
Of course, you’re hiring them to do a job — but you’ll significantly improve your chances of a successful sale if you efficiently work together.
To make the most of this partnership, consider the following tips:
Establish clear lines of communication: Be up front with your agent by discussing your expectations, concerns, and goals. An open and transparent dialogue will ensure that you and your agent are on the same page from start to finish.
Confirm your preferred contact method: Let your agent know whether you prefer to communicate via phone calls, text messages, or emails. This ensures that you connect throughout the process in a manner that works for the both of you.
Trust their expertise: You’re partnering with your listing agent for a reason. Trust their knowledge and advice when it comes to pricing, marketing, and negotiating offers on your behalf.
Be available and responsive: Respond promptly to your agent’s calls, emails, or texts. Timely communication can be critical in addressing any issues that may arise during the home selling process.
Provide necessary disclosure information: Ensure that you provide your agent with accurate and complete information about your property. This includes anything that you think might be negative, which your agent can guide you through.
Be flexible with showings: Accommodate showing requests and open houses as much as possible. The more buyers who can view your home, the higher the likelihood of receiving strong offers. Work with your listing agent to create a showing schedule that works for both of you.
Be open to feedback: Listen to your agent’s feedback after showings and open houses, as they can provide valuable insights into what potential buyers liked or disliked about your property.
The bottom line
Taking the time to understand the various facets of a listing agent is a crucial step in your home selling journey.
Because knowledge is power in real estate.
And the knowledge you have now about listing agents can help you glide through your home selling journey with confidence.
