Selling your home can get stressful and overwhelming, but there is someone who can help: a listing agent. We asked at Sotheby’s International Realty what the advantages of working with a listing agent are, especially if you’re selling your home for the first time.
What is a listing agent?
A listing agent is a real estate agent who works with someone selling their home. A listing agent is independent from a representing potential buyers of that same property.
Why should I hire a listing agent?
While it is possible to sell your property by yourself, that approach may not be the best idea. You’ll have to process documents, list your home, handle interested buyers, negotiate and more all on your own. In contrast, your listing agent will handle everything for you. “It really becomes almost like a concierge service, if it's done properly, where the seller can relax and let somebody else work through the process,” says Janai. “If you're working as an FSBO [for sale by owner], then all of that has to be done on your own, and you might not be working with the best information.”
If you choose to go it alone, you’ll have to handle everything from making a listing to and negotiations yourself. Agents also have expertise and experience to rely on, which you likely don’t when selling your home.
How do commissions work with a listing agent?
A listing agent earns a commission based on the home's final sale price. Commissions are negotiable and will be whatever you and the listing agent agree to.
The commission is paid at the end of the sale, when financial matters like taxes, strata fees, and other charges – known as adjustments – are settled. In BC, often the commission is 6% of the first $100,000 and 3% of the remaining balance. The listing agent then offers half that to the buyer’s agent for the work they’ve done. That means both the listing agent and seller’s agent receive 3% on the first $100,000 and 1.5% on the remaining amount, plus any applicable taxes
Since the listing agent's commission comes from the home's sale price, you won't need to pay them directly in cash at any point.
Do I have to sign a contract?
To list your home on an MLS (multiple listing service) site, such as REW.ca, you are required to sign a contract with an agency. As Janai explains, "we are designated to be your representation, and you are our clients. There's a specific reason for that. When you're working with a realtor, we have a fiduciary duty when you're our clients to act with a certain level of openness [and] integrity. There's a list of things we have to provide that is almost similar to a lawyer." A contract ensures this commitment is upheld.
However, before signing, there are preliminary steps to help you decide if a particular listing agent is the right fit. Initially, you'll be presented with a form. This document outlines the difference between being represented by an agent and choosing not to be. While you’ll sign and initial this form, it is not a contract. Rather, think of it as an acknowledgement that you’ve reviewed this information.
If you decide you want to work with the agent, you’ll then go over the actual contract together, which includes details like the commission structure. This document is known as the . Once signed, you are committed to that agent. Although you can later cancel the contract, there is a 90-day period post-cancellation during which, if your home sells, you will still owe the old agent their commission if you don’t sign with a new agent (or sell it to someone behind your old agent’s back).
From this point, confidentiality applies. "We have to give you full privacy, like confidentiality, so anything that you say to us now becomes confident to us only about your motives, about your reasons for selling – nobody else gets to know that because that may hurt your chances to get your best price," Janai says. "And we maintain that confidentiality even after the transaction is done. We have a duty to not act with conflicts of interest."
To ensure the agent is a good match for you, research them beforehand. Look into how long they've been in the business and their experience in your market. When meeting with them, ask if they have worked with homes and situations similar to yours. As Janai advises, don’t hesitate to ask a potential listing agent whether they can accommodate your timeline and goals. Just keep in mind that until a contract is signed, any information you share can be disclosed to others, including other agents or potential buyers. Be cautious about sharing too much before signing the contract.
Will the listing agent help me price my home?
One of the most important tasks an agent will assist with is determining the price of your home. As Janai explains, "it’s a bit of a science and a bit of an art form." While many factors contribute to your home’s estimated price, they can be grouped into a few key categories, according to Janai:
- The price of active homes nearby: These are the homes currently on the market, which in some ways, represent your competition.
- Recently sold homes in the area: For example, if you’re selling a two-bedroom condo in Vancouver’s West End near Davie St., your listing agent will compare it to similar nearby properties.
- The unique features of your home: Your agent will evaluate factors that could enhance or lower your home’s value, such as recent renovations or defects.
- The market conditions during your selling timeline: Is it a ? How are interest rates influencing buyer behaviour?
Pricing your home correctly is critical for a successful sale and a major reason to work with a listing agent. While your home also has a value, this figure is used for calculating property taxes and doesn’t reflect your home’s fair market price.
Your listing agent will also review homes that didn’t sell, including cancelled or expired listings. "We look at those and again do a similar analysis: age, size, all those factors come into play again that gives us an idea of what the market is absolutely not willing to pay because, typically, those homes were overpriced or they had some other issues that made them undesirable for buyers," Janai says.
A listing agent brings years of experience, confidentiality and support to guide you through the process. Most importantly, they will help you determine the right price for your home. As Janai advises, "Just make sure you're working with the right person for you, because it is the biggest thing you're going to do. It's an emotional journey, and having the right partner representation will make that so much more stress-free." If you’re thinking about selling your home, REW has .
