Real Estate --- The Listing Contract
What is a listing contract? Many buyers are puzzled by all the legal
jargon associated with a sale and the listing contract is very
important to all parties involved. The contract is a written
agreement between the brokerage firm or its representative and the
seller of the property.
The first thing you will realize is that it states this contract is
an exclusive agreement between the parties. This means the only
agent you are going to allow to represent your property on the
market is the one listed on the contract. It will be the brokerage
firm/realtor listed on line one, usually. What this means in plain
English is that you will not deal with other agents unless they go
through your agent to contact you. You will not enable another agent
or agency to offer your house for sale under their logo.
Your property will be appointed a listing number. This is the number
the other real estate agents will be able to use to find your
property in the multiple listing service (MLS) book. It is just like
having an inventory number for the home.
You will also notice on the listing agreement the date of the
contract as well as the expiration date. Usually there will be a
three to six month difference between the two dates. Most listing
contracts are for six month periods. But, you can discuss a shorter
term. You can also have a one day listing for a real estate agent if
you are selling the home on your own. This can happen when an agent
is working with a buyer who drove by and saw your house. The agent
will not get paid a commission if the buyer deals directly with you.
Sometimes an agent will approach a For Sale By Owner (FSBO) with a
potential buyer and ask for a one day listing agreement so that he
or she may show the property. The benefits to this are that the
buyer is usually pre-qualified so there is no problems with the deal
falling through and the agent may have a title company and mortgage
broker already in place to close the deal promptly.
When you have a listing agreement with a real estate agent you will
also have in writing everything that goes with the property. This
may include nothing but the structure or include everything under
the roof. You can be specific. Usually things like window treatments
and blinds, appliances, lighting fixtures, and other things like
this will be left behind when you sell the home. However, if the
chandelier in the dining room belonged to great Aunt Mabel, you can
have it excluded in the listing agreement. Your agent will go over
everything with you when you fill out the contract.
One big issue is the commission which the real estate agent will
earn should he or she sell your home. This is usually around 5 to7%.
Some brokers also have a minimum commission they charge for their
assistance. The commission will always be the percentage or the
minimum, which ever is greater. It is also always paid by the
seller. There is one key detail which you must be aware of in this
paragraph. If your house is taken off the market, for what ever
reason, and you sell your home to a buyer who learned about your
house through the brokerage, you pay the commission. In other words,
you can not sell to “Mr. Smith” for six months after the listing
expired or was taken off the market if “Mr. Smith” first came to
your home because of your agent. If you do, then you still owe the
commission to the brokerage.
Remember the listing agreement is an agreement. You can discuss the
terms when you fill it out to what you feel is fair. Talk with the
broker to find out what works best for you both.
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