I'm curious, in the states where I've owned homes, if you had a buyer's agent, their fee was added to the selling price while the commission that was included in the selling price was split between the listing agent and their agency. On the other hand, if a house was being shown by an MLS agent other than the listing agent, but acting as a seller's agent, then the commission was split between the two agents and their agencies. Some folks thought any agent other than the listing agent or someone from that agent's agency was working for them but, in truth, any agent other than one hired by you as a buyer's agent was a seller's agent.
Hi Paul! It may work differently in the US - I'm speaking to the Canadian way of how it works here, but it's not completely dissimilar. Here, the commission is included in the purchase price as an amount allocated just to the Listing Agent and to the Buyer's Agent (so e.g. 5.0%, split so that 2.5% goes to listing agent, 2.5% goes to the buyer's agent - both of those agents have to give a portion to their agency/brokerage, but that is within the 5%). This doesn't usually get added, it's already worked into the agreement when the seller and their agent go to list. When it comes to negotiating a purchase price, those amounts are already known to be included. I'm not sure what you mean an agent other than listing agent acting as a "seller's agent" - would that not be the listing agent? If someone is showing the property to a potential buyer, it's possible it could be an associate of the listing agent - say someone at their agency/brokerage, or even someone on the listing agent's 'team' - but if that's the case, it's called "Multiple Representation" because they both belong to the same brokerage. So that's allowed here, but it has to be disclosed and agreed upon by all parties including the buyer and seller. I don't think it's the case that "any agent other than one hired by you as a buyer's agent was a seller's agent", because only the listing agent is truly the seller's agent. There is that grey area with Multiple Representation, but there are lots of agents out there (ie. from different brokerages) that a buyer could call, and they don't work as seller's representatives, they are, once called, working for the buyer.
@@naomiknightrealestate Hi Naomi, That explains it, I didn't realize you were in Canada. The way it's looked at here in the USA, the "listing agent" is the specific agent (salesperson or broker) that takes the listing from the seller. The listing is a contract between the seller and the listing agent's agency (brokerage). The listing agent, and anyone employed as an agent by that agency, are legally obligated to represent the seller's interests. In exchange they are entitled to receive a percentage of the selling price price (commission). Most, if not all, real estate brokerages belong to their area's Multiple Listing Service (MLS), so agents from other brokerages can show and sell the property. Since the seller is paying the commission out of the proceeds from the sale per the terms of the listing contract, any agent from another agency in the area's MLS who shows the property with the expectation of sharing in that commission is legally bound by that contract to represent the seller. The fact they're getting a share of the commission also means it's in the agent's best interest to get the highest price possible for the property. The only way an agent can represent a buyer's interest is for the buyer to have a contract with that agent and pay the agent a fee out of their own pocket. That's generally either based on the number of hours they spend showing you houses, or on the listing price of the house you purchase. Since their fee is not tied to the selling price, there's no disincentive for them to help you get the best possible deal. In some states any agent other than the listing agent can be a buyer's agent, in some they must be from a different agency, and in others you are either licensed as one or the other. Truth is, very few people here hire a buyer's agent and many don't even realize that every agent showing them a house is working for the seller.
I'm curious, in the states where I've owned homes, if you had a buyer's agent, their fee was added to the selling price while the commission that was included in the selling price was split between the listing agent and their agency. On the other hand, if a house was being shown by an MLS agent other than the listing agent, but acting as a seller's agent, then the commission was split between the two agents and their agencies. Some folks thought any agent other than the listing agent or someone from that agent's agency was working for them but, in truth, any agent other than one hired by you as a buyer's agent was a seller's agent.
Hi Paul! It may work differently in the US - I'm speaking to the Canadian way of how it works here, but it's not completely dissimilar. Here, the commission is included in the purchase price as an amount allocated just to the Listing Agent and to the Buyer's Agent (so e.g. 5.0%, split so that 2.5% goes to listing agent, 2.5% goes to the buyer's agent - both of those agents have to give a portion to their agency/brokerage, but that is within the 5%). This doesn't usually get added, it's already worked into the agreement when the seller and their agent go to list. When it comes to negotiating a purchase price, those amounts are already known to be included.
I'm not sure what you mean an agent other than listing agent acting as a "seller's agent" - would that not be the listing agent? If someone is showing the property to a potential buyer, it's possible it could be an associate of the listing agent - say someone at their agency/brokerage, or even someone on the listing agent's 'team' - but if that's the case, it's called "Multiple Representation" because they both belong to the same brokerage. So that's allowed here, but it has to be disclosed and agreed upon by all parties including the buyer and seller. I don't think it's the case that "any agent other than one hired by you as a buyer's agent was a seller's agent", because only the listing agent is truly the seller's agent. There is that grey area with Multiple Representation, but there are lots of agents out there (ie. from different brokerages) that a buyer could call, and they don't work as seller's representatives, they are, once called, working for the buyer.
@@naomiknightrealestate Hi Naomi, That explains it, I didn't realize you were in Canada. The way it's looked at here in the USA, the "listing agent" is the specific agent (salesperson or broker) that takes the listing from the seller. The listing is a contract between the seller and the listing agent's agency (brokerage). The listing agent, and anyone employed as an agent by that agency, are legally obligated to represent the seller's interests. In exchange they are entitled to receive a percentage of the selling price price (commission). Most, if not all, real estate brokerages belong to their area's Multiple Listing Service (MLS), so agents from other brokerages can show and sell the property. Since the seller is paying the commission out of the proceeds from the sale per the terms of the listing contract, any agent from another agency in the area's MLS who shows the property with the expectation of sharing in that commission is legally bound by that contract to represent the seller. The fact they're getting a share of the commission also means it's in the agent's best interest to get the highest price possible for the property.
The only way an agent can represent a buyer's interest is for the buyer to have a contract with that agent and pay the agent a fee out of their own pocket. That's generally either based on the number of hours they spend showing you houses, or on the listing price of the house you purchase. Since their fee is not tied to the selling price, there's no disincentive for them to help you get the best possible deal. In some states any agent other than the listing agent can be a buyer's agent, in some they must be from a different agency, and in others you are either licensed as one or the other. Truth is, very few people here hire a buyer's agent and many don't even realize that every agent showing them a house is working for the seller.