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 crucial 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 notice is that it states this contract is an exclusive agreement between the parties. This means the only agent you are going to let 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 do business with other agents unless they go through your agent to contact you. You will not allow 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 see 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 negotiate 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 be 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 matter is the commission which the real estate agent will earn should he or she sell your home. This is usually around 5 to7%. A lot og brokers also have a minimum commission they charge for their help. 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 talk over 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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