In the complicated world of real estate, the terminology used to signify the professional representation in any given deal can become confusing and complex—much like the endeavor of buying a home a itself. When diving into such a major decision, your best bet is to always do your research and iron our any questionable wrinkles by learning all you can about the process and proper terminology—so congrats! Assuming that’s why you’re here, you’re already on the right track! First things first, let’s talk about the basics of terminology in the real estate market in terms of agents. In an ideal real estate transaction:
- A person selling a home hires a listing agent—an expert who helps to market and sell their home.
- A person looking to purchase a home/property has hired a separate agent who assists in finding a home that fits the buyer’s needs—this person is known at the buyer’s agent.
You’re probably wondering…what’s the point of hiring an agent at all? Can’t I just do it all myself?
Well, as a buyer, there are a myriad of benefits to having an agent at the ready. First, and most importantly, the buyer’s agent will look out for your best interest as the buyer. A good agent will successfully guide you through the process with the backing of their professional knowledge in the field. They will know the ins and outs of the market and how to navigate pricing averages, neighborhood ratings, and key information the helps you, as a buyer, to make a highly informed decision. More than just that, a buyer’s agent will have access to Multiple Listing Services (MLS)—a website with all the information available on any particular listing. Finally, a buyer’s agent assists in negotiations, legalities, and paperwork that can be far too complicated an overwhelming for a person with no experience in the matter.
So, why does the seller need a listing agent? Can’t my buyer’s agent just do it all?
Well, yes and no. In the most ideal real estate transaction, the agents for each party will be individual and separate entities—that way, there is security in the understanding that each agent is representing each party with no ulterior motives. Once again, hiring a professional is a vital component to the transaction concluding with ease. Just as a professional can help the buyer narrow in on a home that fit their needs, a listing agent will help the seller of a home to create a plan of action to successfully sell their home—at a price point that fits—and will know exactly how to prepare the home for viewings.
Now that we’ve covered what a buyer’s and listing agent is, you might be wondering what a selling agent is, as you’ve surely heard that term too.
This is where terminology gets a little convoluted, but here’s the easier explanation:
- Prior to any contracts, the agent representing the buyer is referred to as the buyer’s agent, but once the contract is drawn up, they become the selling agent because they have now ‘made a sale’ on the home.
- Once a contract is in play, buyer’s– and selling– agent will be used interchangeably.
- Buyer’s Agent = Selling Agent (with contract)
- Listing Agent = Seller’s Agent
As is the case with all things in life, it’s not always as simple as one agent representing one party and a different agent representing the other. In some special cases, a buyer’s agent can be a seller’s agent too—they are referred to as “single agents.” Dual agency is not permitted in all states; however, it is legal and allowed in Arizona. In these rare cases, the agent becomes a “transaction broker”—meaning, over all else, the agent is representing the transaction itself, not the buyer or seller, per say. They become a neutral go-between for the transaction as a whole. The homebuying process is a journey filled with learning and growing. The terminology may be confusing at first, but we hope we helped to make it just a little bit easier to understand as you make your way through the process for yourself.