This section will explain terms that are needed to understand the content in other sections. You need to understand the difference between a “Listing Agent” and a “Selling Agent” also known as a “Buyer’s Agent”. It also helps to understand the relationship between a REALTOR® (also called a real estate agent) and the “Broker” and/or “Company” that the REALTOR® works for, and the purpose of a Transaction Coordinator.
Listing: when a homeowner enters into a contract with a REALTOR® to sell a home, the contract that is used is called a “Listing Agreement”, and other REALTOR®s refer to this home as the REALTOR’s® “listing”.
The REALTOR® that has the “listing” is known as the Listing Agent.
That “listing” gets entered into a local or regional “Multiple Listing Service” or MLS for short. When the Listing Agent enters the home (for sale) into the MLS, the Listing Agent indicates the commission amount (usually a percentage) that will be paid to the REALTOR® representing the buyer. The commission split between Listing Agent and Buyer’s Agent is normally 50/50.
The vast majority of REALTORs® work for a“Broker”. The Broker can be an individual, but about 99% of the time, the term Broker refers to the company that has an Independent Contractor agreement with the REALTOR®. REALTORs® are usually not employees of the Broker/Company.
The REALTOR® that represents the buyer is contractually designated as the “Selling Agent” but mostly referred to as the “Buyer’s Agent”.
For most people the term REALTOR® has the same meaning as the termReal Estate Agent.
Commission:this is a percentage of the sale price of the home, that the seller pays to the Listing Agent, actually to the Listing Agent’s Broker/Company. Commissions are negotiable, with a larger percentage of homeowners paying 5% to 6%. If you want to understand why commission is at this amount/range, read the history on commission.
Double Ending:When the Listing Agent represents both the Seller and the Buyer, getting ALL the commission.
Transaction Coordinator (TC):Most brokers/companies have one or more Transaction Coordinators, also called “TC”. Every real estate sale has dozens of standard disclosures (Mold, Lead Paint, Carbon Monoxide), reports (Termite, Home Inspections, Title), and disclosures about the specific property being sold. This adds up to a lot of paperwork. The TC handles almost all the paperwork for a flat fee (ranging from about $300 to $500).
Escrow Company:The escrow company controls the sale from the beginning of the process to the end of the process, ensuring that the contract is followed, and distributing the proceeds from the sale to seller with commissions paid to the REALTORs®/Brokers.
Open House: Since most buyers work Monday to Friday, most buyers need to see homes (for sale) on the weekends (Saturday and Sunday). The REALTOR® normally has the homeowner leave the home for a few hours, and the Listing Agent (or another REALTOR®) will stay at the home and put signs out to indicate that the home is available for viewing (no appointment needed).
Broker Preview:One day each week, REALTORs® go out to see homes for sale in their area that are of interest. Different cities have Broker Previews on different days of the week (excluding Saturday and Sunday). Broker Previews are mostly for homes just listed for sale (new on the market).