Listing Agreements: A Quick Overview for Home Sellers
Post from MilitaryByOwner
When you decide to sell your home, you have a choice to make on how you’ll list it. If you’re using a real estate agent to handle the sale of your home, you’ll sign a listing agreement.
A listing agreement is a binding contract between a real estate agent and you, the seller. It gives the agent the right to list and sell your home on your behalf.
Here’s what’s in a listing agreement.
The listing agreement will contain your name, contact information, the address of the property that’s for sale, and the price at which you’re selling it.
Your listing agreement has a beginning and end date. Most agents offer a 30-, 60-, or 90-day agreement. As the seller, the shorter the contract the better. Consider a “right to terminate” clause.
Exclusive right to sell. This is the most common agreement, and grants full rights to your real estate agent. The seller is responsible for the selling and buyer’s commission of the sale. If you find the buyer on your own, you’re still obligated to pay your agent a commission, unless an additional clause is put into the agreement.
Exclusive agency. Granting exclusive rights to your real estate agent is similar to the exclusive right to sell. The difference between the two is that you can place your own ad, and if you find a buyer through said ad, you’re not obligated to pay a commission to the agent.
Open. In an open listing agreement, the seller is not represented by any agent and pays the commission to the broker who brings the buyer. Since you’re not tied to one agent, you will likely only pay the seller’s broker commission. If you find the buyer yourself, you won’t owe any form of commission. However, you might struggle to find a full-service agent willing to agree to an open listing.
Something to think about: Do you want the ability to find your own buyer or work with other agents?
Given the market where you’re advertising your home, how much is fair to provide as commission? If the market has few potential buyers, you might consider offering a higher percentage. If there are many buyers, the agent shouldn’t work as hard to present a buyer and may agree to a smaller commission upon closing.
The seller agent’s job is to provide a ready, willing, and able buyer. If there is a change of intention to sell after an offer has been accepted, you must get consent from the buyers. A commission may still be owed.
Some common things expected of a seller’s agent are to create a listing, network, advocate for you, negotiate offers, and list your home on the MLS (Multiple Listing Service). Anything that you expect of your real estate agent needs to be written into the listing agreement.
Notate your protocol should the agent fail to meet their responsibilities or you break the agreement. If you can’t resolve the issue informally, you need to decide the extra measures you and the agent will take to resolve the conflict.
Listing agreements are in place to protect both you and the real estate agent you hire. Understand that these are the basics of an agreement, but you are always able to seek modifications. You can request a cancellation policy, request the right to change agents, and negotiate the commission price. Talk with your agent to create a listing agreement that makes you both feel comfortable.
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