Why is there an agent needed for both the seller and the buyer in real estate? What do realtors actually do?
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It’s supposed to make sure both sides’ interests are represented by equally knowledgeable professionals. If there were a single agent working for both sides and paid by commission, the agent has their own interests (higher commission, i.e. higher sale price), which aligns with the seller more than the buyer.
Alright, imagine you have a big box of toys that you want to give to another kid. But, you don’t know who wants your toys, and you don’t know how to talk to the other kid to make sure they give you something good in return.
A **seller agent** is like a friendly grown-up who helps you find kids who want your toys. They know how to talk to other grown-ups and make sure you get something good for your toys.
A **buyer agent** is like another friendly grown-up who helps the other kid find toys they want. They make sure the other kid gets the toys they like and that everything is fair.
So, both agents help make sure everyone is happy and gets what they want. 😊
Here’s a life pro tip: If the agent (or lawyer, or doctor) isn’t paid by you, they’re not representing your interest. At all. If you’re not paying them directly, then their job is to help the other side make as much money off of you as possible.
This also includes inspectors of the house you are considering buying. If the realtor arranges for the inspection, the inspector represents the realtor and not you.
In a real estate transaction, nobody gets paid until the deal is done. Agents don’t look out for the seller or the buyer, they look out for themselves. They get together without their clients present and discuss ways they can get the buyer and seller to agree to a sale. They have nobodys interests in mind but their own.
The seller needs an agent to get the seller to lower their price to facilitate the sale. The buyer needs an agent to get the buyer to raise their offer to facilitate the sale.
Well the buyer has usually believed that their broker works specifically for them. Maybe today with the new law changing who pays the commissions to the brokers, things will be different and everyone has their own representation vs everyone working for the seller.
But what the broker actually does is solve & resolve the myriad of issues that come up in every RE sale. Even the simplest of deals can go south in the blink of an eye and this is what a real estate broker is for. They help to keep the ball in play and hopefully move to sale along to, and thru, the closing.
90% of people believe they don’t need a RE broker, esp in a “hot market” and so they try doing a For Sale By Owner (FSBO). Almost 100% of them will contact a listing broker within 3 months.
It’s not. There’s only one agent, employed by the seller, in the UK. Works fine, and since the seller’s agent takes typically 1-1.5% commission, much cheaper.
It’s a bit of a scam in practice but the idea is that if you are the seller of a thing you are going to act in such a way to get the sale for the absolute highest price. If you are the buyer of the thing you want to pay the lowest price. If you have two different people negotiating price for you, you get to equilibrium where both parties are unhappy and able to go ahead with the transaction. In practice though the agents want their commission and both work to make the sale happen going as far to convince their clients to take a bad deal.
Realtors inject themselves into a transaction for which they are functionally unnecessary. The agent fee is almost never something they earn by hard work. The most important thing they actually do, is keep the buyer and seller from meeting before the signing so that neither party makes some stupid promise they later regret. It is a pointless job except in that it puts all the real transactions behind a paywall (MLS listings), which they can then snap up good ones before they hit the market.
The listing agent is hired by the seller, and works for the seller. You can agree that the seller’s agent will represent you as well, but you’re waiving a lot of rights and releasing them from a bunch of legal obligations. Or you can go without, which leaves you even more unprotected.
As far as pricing is concerned, most agents would prefer a fast, smooth, transaction to a higher price.. Getting paid fast with as little effort as possible is preferable to a higher commission, makes them more money in the long run, so they focus on getting the deal into escrow and closed, not fighting to get the highest sale price.
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