Deciding to sell your home is an exciting time. There are so many things to get done; however, the first thing you must do is hire a real estate agent.
Once you have chosen your agent, you will enter into a formal agreement with them. This official document is called the listing agreement. The listing agreement is a written contract that gets the ball rolling and maps out the entire home sale process.
The listing agreement must-knows
In this article, we break down the listing agreement so that you are educated and feel more secure before entering into this important contract.
What is a Listing Agreement?
A listing agreement is a legal contract between the homeowner and the real estate agent. The listing agreement authorizes the agent to represent you in the sale of your home.
Although there are several variations of listing agreements, only three are frequently used.
Exclusive Agency Listing
Homeowners allow only one agent to sell their home in an exclusive agency listing. This agreement allows homebuyers the option of finding their buyer - which, in turn, means the agent receives no commission.
Open listing agreements are generally used for properties that must sell quickly or are more challenging to sell. This listing agreement produces the lowest level of commitment. Any agent can sell your house, and you can quickly end up doing the majority of the work while making less on the sale.
Exclusive Right to Sell
Exclusive Right to Sell is the most frequently used listing agreement. This listing agreement allows the agent complete control over the sale. The agent is authorized to list the property on the MLS, market the property, and receive a commission on the sale of the property.
What is Involved in a Listing Agreement?
The listing agreement involves everything included in the sale of your home. Each listing agreement will differ, but most will follow general guidelines. Most listing agreements include:
- List of seller and agent duties
- Broker's fee
- List price
- Property description
- List of all personal property to be removed upon sale of the home
- List of all personal property to be included in the sale of the home
- Terms for mediation
- Listing Agreement expiration date
Am I Required to Sign the Listing Agreement?
Yes, if you want to sell your home with a real estate agent, you must sign the listing agreement. Listing agreements are signed once you are ready for your agent to begin marketing your home.
How Long Will My Listing Agreement Last?
Listing agreements usually last six months. However, the expiration date is determined using a variety of considerations such as the current market, the condition of the home, and comparable homes in your neighborhood.
Can I Negotiate the Listing Agreement?
Everything is negotiable. If you are not happy with the proposed terms, communicate this to your agent. Standard negotiations on listing agreements are agent commission, list price, and expiration date.
What Should I Pay Special Attention to on My Listing Agreement?
Because a listing agreement is a legally binding contract, you must pay close attention to the details before signing your name on the dotted line.
Check the expiration date. If you are not comfortable with the expiration date, don't sign it without speaking to your agent.
Double-check that the commission you and your agent agreed upon is written correctly into the listing agreement
You should never feel uncomfortable with the terms of the agreement. A good agent will compromise by negotiating terms and will never push you into any terms that make you uneasy.
How Do I Terminate My Listing Agreement?
Since listings agreements are legal contracts, they aren't meant to be terminated. Before accepting the listing agreement, ask your agent if they will consent to add written terms for early termination.
What is the Protection Period?
The protection period is part of the listing agreement that solely protects the real estate agent. It prevents the seller from double-crossing the agent by telling the buyers to purchase the home from them after the listing agreement expires.
What Does the Listing Agreement Cost?
A listing agreement doesn't cost you anything. Instead, the agreement determines the agent's compensation at closing.
What if My House Doesn't Sell Before the Listing Agreement Expires?
If your home doesn't sell before the listing agreement expires, you can renew it with your current agent, look for a new agent, or take your house off the market.
Listing Agreement 101
You must understand what you are signing regarding your listing agreement. The listing agreement manages your home sale, from your asking price to your agent's commission. Be sure to find an agent with whom you are comfortable negotiating the terms of your listing agreement to ensure a pleasant home selling experience.
Questions about selling with Glass House Real Estate?
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