An exclusive seller agent works solely in the best interest of the seller. It is the seller agent's job to make the seller aware of the dos, and the don'ts in the selling process. In the United States, due to the often critical task that a seller agent does it is required that the seller agent maintain errors and omissions insurance. Seller agents also have to pay into their State's Real Estate Guaranty Fund based on the Real Estate Commission requirements. Seller agents are also responsible for maintaining various types of technology tools to aid in the quest to research the sales of properties and keep updates on the real estate market. They are required to live up to professional ethics to belong to associations that keep them up to date with the right contracts and forms to protect the seller's interest. Seller agents have to continually take education to stay abreast of the current law to qualify to renew their license terms.
Seller agents only get paid out of results, so seller agents are motivated when they have an exclusive seller's agreement. A seller's agent has to use many resources that will be a direct cost to the seller agent regardless of the outcome.
A seller's agent job in many cases is stressful in dealing with sellers who do not understand how the real estate market works. Some sellers are under the impression that some seller's agents are so skilled that they can list a house at any high price, and it will sell. The mechanics of the real estate market is complicated for some sellers to understand. The main governors of the real estate market are demand and time. When there is a shortage of houses, then the need for dwellings increases with the price. Still, in a real estate market where there is demand, there is a significant obstacle to overcome, and that is an appraisal. Most buyers need to get a loan to buy a house, and the lender depends on the appraised value to support the amount they are willing to risk lending. The lender will lend a percentage of the appraisal value. In markets that there is a demand for houses appraisal values usually lags, so to purchase a house beyond the appraised value the buyer has to have disposable cash to put as a down payment to make up the difference between what the lender is willing to lend and the listing price. In most cases, not many people have a great stash of cash lying around to use for that purpose.
Another obstacle that a seller's agent faces is time. In some case a seller may be faced with a short sale, relocation, a divorce, major illness, death or the seller is buying another house and need the sale to their home to pay for the down payment and closing cost. All these issues are time-related and could impact the negotiation of the final price. The lower the price of a listing, the more views the house gets from buyers. A skilled buyer's agent usually submits an offer with an escalation clause agreement to compete when listing prices are below market. The more views, the faster the sale, so selecting the right listing price becomes a balancing act for the seller's agent.
A skilled real estate agent realizes the many challenges that exist and takes nothing for granted. A qualified seller's agent usually asks questions of the seller to discover the obstacles to overcome and then presents the seller with solutions of how they intend to move forward. In some cases where the seller listing price is rational then the seller's agent may advise the seller what needs to atheistically be done to get the listed price under a sale contract in a timely fashion.
Due to the many tasks of a skilled seller's agent most skilled buyer's agent does not like to subject themselves to any other type of contract other an exclusive seller's agreement so that their investment of time is protected.