What Does a Listing Agent or Seller’s Agent Do in Los Angeles?
Are the Listing Agent and Selling Agent the Same?
No, a listing agent and a selling agent are not the same. They have distinct roles and represent different parties in a real estate transaction. While it can be confusing, the buyer’s agent is called the selling agent. Ultimately, the buyer is purchasing the property; hence, the selling agent assists in the sale. The listing agent and the seller’s agent are the same, both representing the property seller. They differ from the selling agent, who represents property buyers.
What is the Listing Agent’s Duty?
Under the listing agreement, the seller's agent acts solely for the seller, providing integrity, honesty, and loyalty. They must diligently exercise skill and care, deal honestly and in good faith, and disclose all facts affecting the property's value or desirability unknown to the sellers and buyers.
What Does the Listing Agent Do?
As a seller, you may have many questions: Should you do a pre-inspection? Sell as-is or update before selling? Is the return on investment worth the hassle? The listing agent can help you decide based on your immediate needs and the current market conditions by asking the right questions, ensuring the most appropriate course of action.
Conduct thorough research on the property by checking permits online, understanding zoning regulations and lot size, identifying updates that could add value, and learning the house's unique features. Familiarize yourself with local and state ordinances and their impact on the sale. Investigate if there are tax incentives like the Mills Act or special zoning qualifications that could significantly enhance the property's value. Additionally, define the target buyers. This comprehensive approach will help highlight the property's strengths and appeal to the right audience.
Advising the seller on pricing the home appropriately by conducting a comparative market analysis (CMA) of similar properties.
Marketing and promoting the listed property through various channels, such as the multiple listing service (MLS), professional photography, open houses, etc.
Assisting the seller in preparing the home for sale by guiding repairs, staging, decluttering, etc.
Coordinating property showings and open houses for prospective buyers.
Reviewing and negotiating offers from buyers on the seller's behalf to secure the best price and terms.
Informing the seller about required property disclosures and assisting in completing disclosure forms.
Facilitating the transaction process by handling paperwork and communicating with the buyer's agent until closing.
Representing the seller's best interests as a fiduciary throughout the transaction.
Coordinate showings and act as the central orchestrator with the buyer's agent, inspectors, escrow, title, appraisers, and contractors. Ensure clear communication and a smooth transaction, using diplomacy, honesty, and ethics to show respect to all parties for mutual benefit and successful results.
A listing agent's responsibilities revolve around effectively marketing the property, advising the seller, negotiating favorable terms, and managing the sale process from listing to closing while prioritizing the seller's interests.
Can I contact the listing agent directly?
Yes, you can contact the listing agent directly if you like. Their contact information is publicly available on real estate portals such as Redfin, Realtor.com, and Zillow.
Can the listing agent disclose other offers?
Yes. According to the California Residential Purchase Agreement, offers are not necessarily confidential. The seller or listing agent may disclose the existence, terms, or conditions of a buyer's offer unless all parties and their agents have signed a written confidentiality agreement.
Can the listing agent also represent the buyer?
Yes, a realtor can represent both the seller and the buyer in a transaction, but only with the knowledge and consent of both parties per the California Residential Purchase agreement. In a dual-agency situation, the agent must maintain integrity and loyalty to the seller and the buyer. Without express permission, the agent cannot disclose confidential information about either party, such as financial positions, motivations, or bargaining positions. This includes not revealing the seller's willingness to accept a lower price or the buyer's willingness to pay a higher price.
Can a listing agent lie about offers?
Unfortunately, yes, listing agents can lie about offers. There is no neutral third party where you can verify the number of offers. While agents could lose their license if proven dishonest, and it's not worth the risk, some still do it. To protect yourself, you can use an escalation clause that requires the listing agent to show you the highest offer. However, some listing agents may opt out of this clause.
Can the listing agent contact the appraiser?
Yes, listing agents can and should contact appraisers to provide relevant information. It is a myth that agents cannot communicate with appraisers. While it is illegal to influence the appraiser's valuation, sharing helpful details is allowed and encouraged. Key points include:
Listing recent repairs, updates, or renovations
Providing comparable sales used to price the home
Sharing information about buyer activity and offers received
Offering neighborhood details affecting the property's value
Supplying this information helps appraisers understand the property better and supports the agent's pricing. Preparing an information packet for the appraiser is a best practice for listing agents.
Can the listing agent contact the buyer's lender?
Under the California Residential Purchase Agreement (RPA), a buyer authorizes the seller and the seller’s agent to contact the buyer’s lender to verify the status of any loan specified in the RPA or any alternate loan refer to paragraph 5C(3) of the RPA. The RPA clarifies that this authority is granted regardless of whether the buyer has a loan contingency or not.
Yes, listing agents must contact the buyer's lender to verify the buyer's qualifications. This ensures the buyer is well-qualified and can complete the purchase, protecting the seller's interests. Listing agents typically ask:
How qualified is the buyer? And is this a pre-approval or full approval?
Can the lender provide the assurance you need to feel comfortable moving forward with the buyer?
What is the approved loan amount and purchase price range?
How long has the lender known/worked with the buyer?
What is the estimated timeline for final approval and closing?
If the appraisal comes in lower, can the buyer handle the impact? Can the buyer remove the appraisal contingency to remain competitive in a multiple-offer situation?
While lenders are not required to disclose private financial details, they can confirm basic approval information, which real estate professionals consider reasonable due diligence to ensure they are selecting a buyer who can close the transaction and save the seller headaches and hassles.
Should I use the listing agent?
It is generally not recommended for buyers to use the listing agent when purchasing a home. Here are some reasons why:
Conflict of Interest: The listing agent has a fiduciary duty to the seller, creating an inherent conflict of interest.
Lack of Proper Representation: The listing agent cannot fully advocate for the buyer's interests or share confidential information beneficial to the buyer.
Uneven Negotiation: The listing agent aims to get the highest price for the seller, which may compromise the buyer's negotiation position.
Expertise Imbalance: Buyers typically lack the real estate expertise and negotiation skills of listing agents, putting them at a disadvantage.
No Cost Savings: Buyers do not save on commission costs using the listing agent, as the total commission is pre-determined in the listing agreement.
A dedicated buyer's agent ensures your interests are fully represented and negotiated.
Should the listing agent be present at a home inspection?
Yes, the listing agent should be present at the home inspection:
Seller Representation: To represent the seller's interests and address any concerns or questions during the inspection.
Information Provider: To provide the inspector and buyer additional context or information about the property.
Mediator: To mediate potential misunderstandings or disputes between the inspector and buyer.
Smooth Process: Ensure the inspection process runs smoothly, especially if the buyer's agent is absent.
Insight: To gain valuable insights into the property's condition and issues.
Issue Assessment: To gauge the severity of any issues, helping the agent better understand potential negotiations, price reductions, and credit requests.
The listing agent can effectively manage the inspection process and better advocate for the seller’s interests by being present.
Should the listing agent be present at all showings?
Yes and no, depending on the situation:
The listing agent's presence can elevate luxury property showings and is essential. It becomes necessary if the seller requests that the listing agent be present for all showings. Yet, for some buyers, privacy is vital. They envision their future freely, without an agent’s gaze, exploring every nook and commenting openly.
The listing agent's presence can streamline the process. The listing agent can provide specific details, such as how to operate the fireplace or whether the chandelier is included in the sale, ensuring no surprises and effectively managing expectations.
How do listing agents get paid?
Listing agents are paid a commission, a percentage of the home's sale price agreed upon in the listing agreement.
Commission Percentage: It is negotiable. Typically, it is 5-6% of the sale price, as the listing agreement outlines. Split with Buyer’s Agent: The commission is often split, with around 50% going to the buyer’s agent.
Brokerage Split: After the sale, the commission goes to the brokers (the firms the agents work for), who then split it with the agents based on a pre-negotiated agreement (e.g., 80/20 or 70/30).
Payment Timing: The listing agent gets paid only when the home sells and the transaction closes. No Sale,
No Commission: If the home doesn’t sell, the listing agent usually isn’t paid unless the listing agreement specifies otherwise.
Deduction at Closing: The commission is deducted from the seller’s proceeds at closing.
Are Listing Agent fees-commission tax deductible?
The commissions paid to the listing and buyer's agents are deductible expenses when calculating your capital gain. These commissions lower the net sale proceeds, which are used to determine the taxable gain.
Conclusion
From market analysis to managing the entire sales process, a skilled listing agent ensures your property is effectively marketed and sold under the best terms. A great listing agent has the heart of a teacher, stays up-to-date with local happenings, and is intimately familiar with the market, its conditions, and today’s ever-changing disclosures and forms. They are effective communicators, honest, transparent, diplomatic, and excellent negotiators. Their ability to find a happy medium for everyone involved makes the transaction a smooth and positive experience.
If you're seeking a skilled listing agent in Los Angeles, Santa Monica, West LA, Brentwood, Palisades, Malibu, Venice, or anywhere in the westside, we can help. Our expertise will guide you through the complex real estate landscape with ease. Contact us for a complimentary consultation.