Trying to understand what a seller is actually buying when they hire a listing agent

Question

I've been reading listing agreements for practice because I want to understand the service side before I ever sign one. The commission line is easy to read. What the seller gets for it is harder.

As far as I can tell there are two very different pitches out there. One says the listing agent's main value is pricing and negotiation, meaning the agent's judgment about what the house is worth and how to handle offers is what earns the fee, and the photos and the open house are table stakes anyone can do. The other says the value is distribution and marketing, meaning the agent's job is to put the house in front of the largest possible number of qualified buyers, and the price mostly gets set by whoever shows up.

They lead to different behavior. The first one says hire the agent who argues with you about your number. The second says hire the one with the biggest reach and the best presentation.

Since the settlement, listing agents have to explain their value more explicitly than they used to, and I've noticed that when they do, they mostly explain one of these two things and skip the other. I don't know if that's because the two are really the same skill wearing different clothes, or because agents pick a lane.

Which one is doing the work?

aliyah_b · Answer

Pricing, and I say that as someone who spent last spring watching two similar houses on the same street go completely different ways. Same builder, same layout, roughly the same condition. One listed about six percent over what the recent sales supported, sat, took a cut, took another cut, and closed under the number it would have gotten in week one. The other listed at a number that looked slightly low to me and had multiple offers inside a weekend.

Marketing got both of them seen. Everyone with an app saw both. What separated them was the number on day one.

Where I'd push back on my own answer is that the marketing case is stronger in thinner markets. If you're selling something unusual, a converted mill building or a house on twelve acres, there may not be a comp within five miles and the buyer pool is genuinely small. Then finding the buyer is most of the job and pricing is a guess until someone bites.

So I don't think they're the same skill. I think which one matters depends on how many comparable sales exist near you, and how public those sales are, since some states don't disclose sale prices at all and pricing there leans much harder on the agent's own transaction history.

Trying to understand what a seller is actually buying when they hire a listing agent

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