There are two sides to every story, the saying goes.
There are also two sides to every home, at least when it comes to selling it.
While it is second nature for real estate agents to discuss sides without giving it a second thought, the concept might be a little foreign to a consumer who only buys a home every seven to 10 years.
The concept of “sides” is the topic of this month’s question and answer session between Lane Hornung, CEO and founder of 8z Real Estate, and John Rebchook of InsideRealEstateNews.
The Q&A is part of 8z’s Real Estate 101 Series.
John: Let’s start with the basics. What are sides?
Lane: It is kind of an insider term, no pun intended, that agents use for every home that sells. There are two sides to every real estate transaction. That is, the listing side and the buyer side. So you typically have a listing agent and a buyer’s agent.
John: When you think about it, that is a little different than most industries. For example, if you are buying an insurance policy, your insurance broker won’t be talking to other agents to find you a policy.
Lane: It is a little unique. But it is important to have two sides, because the listing agent is looking out for the fiduciary interest of the seller and the buyer’s agent is looking out for the fiduciary interest of the buyer.
There can also be a transaction agent, who brokers both sides of the transaction.
But the vast majority of real estate transactions involve a listing agent and a buyer’s agent.
John: Are there other reasons that both the seller and buyer would want to be represented by their own agents?
Lane: Yes. One of the services a good agent provides is being able to look at the transaction objectively.
If you are a buyer, the listing agent is not going to become your advocate and vice versa.
But both the listing agent and the buyer’s agent should be able to look at the transaction without emotion and drama.
Often, when emotion clouds a transaction, you do not end up with a good result.
John: Is having good representation on both sides especially important in a market like the Denver area or in the Bay Area around San Francisco, where multiple offers and bidding wars are increasingly common?
Lane: Absolutely. You want an agent who is active in the market. Today’s market is tricky, with lots of multiple offer situations.
Things like rent-backs are common today, so sellers have time to find a replacement home. They were unheard of three years ago.
John: You mentioned that you want an agent who is active in today’s market. That would be true whether you are the buyer or the seller, wouldn’t it?
Lane: Of course. At 8z, one of our core values is to put the client first.
Transactions work best when both sides are putting their clients first. 8zers love it when they are dealing with an agent on the other side who also is putting their client’s interest first and not their own interests first.
John: The goal, of course, is to complete the transaction.
Lane: Right. If the agents on both sides are putting their clients first, you have a much better chance of crossing the finish line.
Sometimes people lose sight of the fact that the goal is to sell the home for a price a willing seller accepts and a willing buyer pays.
Once the home is under contract, if the seller still wants to sell the home and the buyer still wants to buy the home, good agents on each side can usually make that happen.