Ask Brian: Is It Better To Be a Buying or Listing Agent?

Ask Brian is a weekly column by Real Estate Expert Brian Kline. If you have questions on real estate investing, DIY, home buying/selling, or other housing inquiries please email your questions to askbrian@realtybiznews.com.

Question from Brooke in TX: Hi Brian, My life seems to be kind of directionless right now. I’m 22 and have worked as a waitress and some retail sales in a big box department store. Neither paid very well nor am I excited about making a career of either. My uncle is a pretty successful real estate agent, and he thinks I should give it a try. He’s a seller’s agent and says that is the best way to go. I appreciate his advice, but he works out of a small office with only about six agents. From what I understand, two of them work as both seller and buyer agents and two work mostly as buyer agents. I don’t think the office owner directly works many deals at all. That means my uncle is the only one in the office only working only as a seller’s agent. That makes me wonder why he is the only one doing that? My uncle is not offering me a job, so I don’t feel obligated to do everything he is suggesting. The bottom line: is it better to be a selling agent or buying agent?

Answer: Hi Brooke. There is no simple answer to your question, but I do think that there is a general consensus that most agents would prefer being selling agents. Before we get into the reasons, let’s clarify a technical point. An agent doesn’t become a selling agent until there is a contract signed with a buyer. Up until that point, the agent is a listing agent. There is a reason why I make that technical point. Once the contract is signed with the buyer, the buyer’s agent also becomes a selling agent. Both agents have the same goal to sell the house. For that reason, I prefer the terms buying agent and listing agent. Now, let’s look at why one career path might be preferred over the other.

To start with, a well-rounded real estate agent should have experience on both sides of the deal. That’s how you learn what might be motivating the other party, what negotiating strategy they are likely to use, and a lot of other valuable information. Next, let’s take a quick look at the situation in your uncle’s office. It appears there is a pretty good mix of what each agent is trying to do. That’s what you need for a well-run office so that it attracts both buyers and sellers as clients. That’s also what we need for the industry to be balanced. So even if more agents prefer to be listing agents, there is an equal need (and opportunity) for buyer agents.

Some agents are both listing and buying agents. This can sometimes work in small communities without many agents or transactions. However, in larger communities and in the industry in general, the buyers and sellers want to be represented by their own agents. And they want a highly skilled agent which leads to specializing in one or the other. On the other hand, it does happen that one agent represents both the buyer and seller. This can complicate the transaction for the agent and in some states, it is not allowed. When one agent works for both, they become a “transaction broker.” They cannot effectively represent both the seller and buyer. They have to be a neutral go-between. In states where it is legal, the agent must inform each party of the dual agency situation and receive each party’s consent before moving forward. Brooke, I don’t recommend this situation whenever it can be avoided, and it certainly is not appropriate for a new agent. So, if you were thinking about trying this career path, I suggest that you not do it.

Now let’s look at some key reasons why you might want to be a listing agent.

1. You have a contract in place from the beginning of the deal. It’s not guaranteed that you’ll be paid a commission, but the Listing Agreement gives you exclusive rights to the listing for a set amount of time. That is not the case with buyer’s agents because it often happens that a buyer ends up buying in a different area and from a different agent.

2. The listing agent’s name goes on all the marketing materials. Marketing is a huge part of real estate sales and having your name on a lot of marketing materials can be a big benefit. If you are thinking about becoming both a listing and buying agent, having your name on marketing materials will also bring in a lot of buyers. It also brings in more sellers.

3. Working with sellers is usually more efficient. This goes back to point number one; you have an exclusive contract with the sellers. You don’t need to work with as many people. Buying agents must work with many more people because buyers are not obligated to complete the purchase through an exclusive agent. Working with fewer people is always going to be more efficient.

4. Efficiency gives you more control over your schedule. The schedule of a real estate agent tends to be hectic. You have to work when most sellers and buyers have time off. That means working weekends, evenings, holidays, and summer is your busiest season. Buying agents are expected to drop everything to show houses whenever a buyer calls about a house they are interested in. A listing agent also has a bit of a hectic schedule but not as hectic. They have to make themselves available based on the seller’s schedule for initial interviews and to present the market analysis. However, developing the market analysis and marketing materials can be done on the listing agent’s schedule without being at the mercy of the seller being present. One exception would be frequently running open houses on weekends.

Brooke, much of that likely supports why your uncle suggests that you become a listing agent. But remember, the industry needs a balance between agent types. When you are a new real estate agent, what you need the most is experience. You want experience on both sides of the transactions. If the more experienced agents are gravitating towards being listing agents, you’ll probably gain more experience as a buying agent. Then when you have experience on that side of the transaction you can look at transitioning to a listing agent.

What suggestions can you offer a person considering a career as a real estate agent? Please comment with your thoughts.

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