Should You Become a Listing Agent, Buyer Agent, or Both?
Please Note: The correct terminology for a buyer agent is "selling agent". To me, that has always been very confusing so I'm going to simplify things. When I use the term "buyer agent", I'm talking about the agent who represents the buyer and when I use the term "seller's agent" or "listing agent" I'm talking about the agent who represents the seller.
There's nothing saying you have to declare yourself a buyer agent, listing agent or both but most agents usually have a preference after a few years in the business. I know I did and I always preferred the listing side.
New agents usually start by working with buyers simply because listings are so hard to get. As the agent builds their business they'll start getting listing opportunities and realize there's much more paperwork, detailed work, and costs working the listing side. If the agent continues to acquire more listings, the work becomes more intensive and eventually the agent figures out they need help or they'll start making mistakes. That's when they usually hire an administrative assistant. Now their life is becoming a bit more complicated.
By the way, we have three, excellent, full time admins on our team to provide all the services we offer to our clients. That means there's always pressure on me to make sure our team is working to their potential. If our business goes down, our admins still need to be paid so I can never really relax. That comes with a growing business.
On the flip side, many agents understandably like the simplicity of showing homes to their clients and then helping them negotiate the purchase of the home. They don't have the cost nor worries of a listing agent. They might not make as much as a listing agent with multiple listings, but they also don't have the stress and pressures.
The Pros and Cons of Working as a Buyer Agent
Pros
Buyer agents can get a fast start. In normal markets listings can take longer to sell. When you're working with a buyer agent ready to go, the process can move pretty quickly.
It's much less expensive working the buyer rather than the listing side. Although agents will have the same association fees and dues but beyond that, a buyer agent's costs are very minimal. Their costs are basically the wear and tear on their car. If you're not in a position to put the money required for listing homes the right way, starting out as a buyer agent makes sense.
Buyer agents don't require an administrative assistant nor is there a need to outfit and pay for office space.
Although they might not be making as much as agents with multiples agents, buyer agents have less pressure and stress
There are fewer ways to get into trouble representing buyers than listing homes. If you're risk averse, becoming a buyer agent is a good way to go.
Cons
Buyer agents might spend days or weeks showing homes to a client. You can drive the tires off your car and end up with nothing to show for it. If the client decides not to buy, that's all wasted time they could have used to be more productive.
Buyer agents are at the whim of their clients when they want to see homes. That usually means weekends or after work on weekdays, the same time the agent might have plans for their family. There will be scheduling conflicts so that can be an issue.
Showing homes can easily take 3-4 hours out of an agent's day. If the client doesn't really know what area they want to live, it can be much longer. When we have buyers from out town, they not only want to look at homes too, they also want to drive the area with the agent. That can turn into an all day affair. The agent can't be on the phone working other deals with their client in the car, so their other business shuts down until they can get back to the office.
If your client wants to see homes and is ready to make a decision the same time you're planning a vacation, it can be a problem.
The Pros and Cons of Working as a Listing Agent
Pros
When a home is listed on the MLS, thousands and thousands of agents and buyers without agents will see it. Between the MLS, Realtor.com, Zillow, Redfin and all the other syndicated sites, you'll have amazing and immediate exposure for your listing.
There's an old rule of thumb ... Each listing should lead to at least two buyers. While I don't believe those numbers, the concept is correct.
The listing agent can be on vacation and their listing is still working for them. You're only making money as a buyer agent when your client is in the car looking at homes.
In a strong seller's market like we're experiencing today, the listing agents are the ones making the most money. Here's a good example ... We just listed a home and within two days of it hitting the MLS we had 101 different groups walked through it. Our listing agent will be getting half the commission but who out of those other buyer agents are going to get the other half?
If the listing agent has done a good job for the Seller, chances are the Seller will also use them on the buy side. I call that a "double pop" and they're fun :-)
Cons
Listing and marketing a luxury home (at least the way we do it) costs from $750 to $1,000 and it's all incurred within the first 10 days. We provide staging, professional photography, copywriting, marketing, an aerial flyover, and a myriad of other services. If those homes don't sell, we're out the money. We might have 5 or 6 listings coming in at one time, so that's a sizeable and risky outlay. You just have to be prepared for costs like that as a listing agent and just hope all the homes sell.
When the the demand for homes is low (a soft market) the buyer agents will be in the driver's seat. They'll be the ones with the clients who will be getting half the commission and the listing agents will be the ones hoping the client likes their home.
So What's the Answer for New Agents?
In my opinion, every agent should start out representing buyers. They should get at least 8-10 deals under their belt before they make the move to listing homes. The only way they're really going to gain knowledge about their market is walking through homes. They can't do that sitting behind a desk in the office looking at the MLS.
As a busy buyer agent, it won't take long for you to realize whether a home is overpriced, underpriced or priced fairly. That knowledge will help you tremendously if and when you decide to start listing homes.
If you're "listing heavy" in a strong market like we're experiencing, you're in a good place. It's very difficult to be a buyer agent right now, but eventually the market will shift. There will be fewer buyers and a glut of listings for sale. That's the time you want to change horses and start using your buyer agent skills.