{"id":1472,"date":"2021-06-18T10:00:59","date_gmt":"2021-06-18T14:00:59","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=1472"},"modified":"2024-04-25T23:20:00","modified_gmt":"2024-04-26T03:20:00","slug":"selling-your-home-a-few-things-to-know-about-listing-agreements","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/selling-your-home-a-few-things-to-know-about-listing-agreements\/","title":{"rendered":"Selling Your Home? A Few Things to Know About Listing Agreements"},"content":{"rendered":"\n
\"Image<\/figure><\/div>\n\n\n\n

You start off the marketing and sale of your home with a\nlisting agreement. This document controls all the terms of the sale. It sets\nthe keynote for a string of important decisions and legal agreements. <\/p>\n\n\n\n

In this article, we\u2019ll discuss some recent news about\nlisting agreements, as well as the broad-brush concepts every seller must know.\nFirst, we look at some sales tactics to look out for before you even think of\nselling. Then, we\u2019ll explore how to understand the terms of the agreement\nyou\u2019ll sign when you\u2019re ready.<\/p>\n\n\n\n\n\n\n\n

Cash for Listing? <\/h2>\n\n\n\n

Getting a listing agreement signed is valuable to a listing\ncompany. So much so, that some companies may try to snag potential sellers well\nbefore they\u2019re ready to sell. This sales tactic has been in the news of late,\nso let\u2019s see what\u2019s going on.<\/p>\n\n\n\n

In a cash-for-listing deal, you, the seller, agree to list\nwith the company whenever<\/em> you might sell. For handing over that control,\nyou\u2019ll get money. Depending on your home value, you might get anywhere from several\nhundred dollars to $5,000. You keep it no matter what you decide about selling.\nBut once you sign on, the company has exclusive, binding dibs on the listing of\nyour home. Depending on the document\u2019s stated termination date, you could be\nbound up to four decades. Not even a mortgage runs that long!<\/p>\n\n\n\n

In exchange for that payment from the listing company, you\nlose your choice of real estate agents if you ever want to sell. You\u2019re bound\nto sign another agreement with the same company. If you like the deal, great.\nIt\u2019s legal. Just be aware of its future effect. Say you want to cancel the\ncontract. Expect the cancellation fee to run into the thousands of dollars. Pay\nit, or you might be dealing with a collections company, or a lien on the\nproperty that keeps you from selling with another agent. <\/p>\n\n\n\n

That\u2019s the scoop on cash for listings. Now, on to some\ngeneral concepts the seller should know about listing agreements.<\/p>\n\n\n\n

What Should a Listing Agreement Say?<\/h2>\n\n\n\n

The listing agreement should say the seller has the right to\nsell the home. It should empower the real estate agent or broker to handle the sale.\nThe listing agreement should also name any appliances, furnishings, or personal\neffects being sold in or with the home. It should set forth anti-discrimination\nprovisions required by law. It should not<\/em> promise your home will sell.\nIn some cases, listed homes do not sell. In this case, the agreement expires,\nand a seller might decide to keep the house, seek a new agent or broker, or\nrenew the agreement with the same agent.<\/p>\n\n\n\n

\u261b<\/em><\/strong> <\/em><\/strong>An agent has some\nresponsibilities to the seller that a broker doesn\u2019t. Read about the difference\nbetween an agent and a broker in Your\nReal Estate Agent\u2019s Fiduciary Duties<\/a>.<\/em><\/strong><\/p>\n\n\n\n

The standard document is called the exclusive right of sale\nlisting agreement<\/em>. It starts with a boilerplate form. It allows a\nprofessional to list the home at a certain price and market it for a\ncommission. Listing agreements must state the parties\u2019 names, the property\u2019s\nstreet address and legal description, the list price, and a termination date\nand time. <\/p>\n\n\n\n

The listing agreement is typically drafted to be in force for\ntwo to six months. This can be negotiated to fit your situation and the pace of\nyour local market. There\u2019s a protection period<\/em> for a short time after termination.\nIf anyone the agent attracted does buy your house, a protection period means the\nagent will still get the commission. <\/p>\n\n\n\n

There are some alternative listing agreement types, like theexclusive agency listing<\/em>, which gives the seller the option to find\na buyer and skip the commission payment. Before seeking such an agreement, know\nthat the buyer is ultimately paying for your home \u2014 with the related fees\npriced into the deal.<\/p>\n\n\n\n

There is also the open listing agreement<\/em>, through\nwhich the seller can choose any agent or no agent. But most sellers want the most\nenergetic marketing services available \u2014 and those come from an agent on a\ncommission. <\/p>\n\n\n\n

Don\u2019t Like the Terms? <\/h2>\n\n\n\n

Negotiate. You can work out compromises on just about anything in the listing agreement before signing. But the guidance of a trustworthy real estate agent is valuable. The agent will suggest optimal pricing and a likely sale date range by drawing on an intricate store of market data, blended with experience. You can even negotiate your agent\u2019s commission if you do so before signing the document. Yet in normal circumstances, agents are unlikely to lower commissions. A commission gets shared with the buyer\u2019s agent, and marketing your home is part of the deal. As Redfin<\/a> explains:<\/p>\n\n\n\n

Typically, real estate\ncommission is 5% to 6% of the home\u2019s sale price. In most areas, the buyer\u2019s\nagent receives 2.5% to 3% in commission and the seller\u2019s agent receives 2.5% to\n3% in commission. This can vary by agent and location.<\/em><\/p>\n\n\n\n

Investing in a good agent matters. If you have an agent you\ntrust and like, your selling experience will reflect that relationship. You\u2019ll need\nyour agent to explain and guide you through your appraisals and inspections,\nand the ongoing give-and-take with the buyer. Of course, sellers need not adhere\nto all recommendations an agent or real estate company offers. Sellers are free\nto pick out their own additional experts: mortgage professionals, title insurance\ncompanies, and settlement companies, for a few examples.<\/p>\n\n\n\n

What if you run into a serious argument with the agent? The\ntypical listing agreement says disagreements will be mediated by a neutral third\nparty. It\u2019s also likely to direct the seller to pay any costs the listing agent\nincurred if the seller calls off their agreement. But a good agent works hard\nfor the seller. And in case of a breakdown in the relationship, an agent will\noften suggest that the seller work with a different agent in the company or let\nthe seller walk away from the agreement without penalty. This isn\u2019t promised,\nthough!<\/p>\n\n\n\n

If you\u2019re still deciding among agents, online reviews that describe how other people dealt with challenges can provide insights. Of course, you\u2019ll want to see positive online reviews; but know that they aren\u2019t always the full story. Negative online reviews may sometimes be removed under pressure from companies<\/a>. <\/p>\n\n\n\n

Key Takeaway: List With an Agent You\u2019ll Appreciate When You Sell <\/h2>\n\n\n\n

The best agent is a diligent researcher and excellent\ncommunicator with a flair for marketing. It\u2019s not a company that uses emotional\nsales ploys, or offers short-term rewards and long-term burdens. The listing\nagreement directs every aspect of your home sale, so pick your representative wisely.\nNegotiate the terms if you believe it is important to do so, and find a real\nestate agent who has your best interest at heart. <\/p>\n\n\n\n

Do you have case-specific questions about financial, tax, or\ninheritance matters? Sit down with your financial adviser, your tax pro, or an\nattorney admitted in your home\u2019s state. With the right guidance and support,\nany seller should be able to attain a fair and successful sale.  <\/p>\n\n\n\n

Supporting References<\/strong><\/p>\n\n\n\n

Todd Ulrich, WFTV.com<\/em>: Action 9 Investigates Realtor Offer for Homeowners<\/a> (Jan. 26, 2021). <\/p>\n\n\n\n

Justin Gray, WSB-TV:<\/em> Metro Homeowners Locked Into 40-Year Contracts With Real Estate Company<\/a> (May 26, 2021).\u00a0 <\/p>\n\n\n\n

Corinne Rivera, HomeLight: Breaking Down the Big, Scary Listing Agreement Into a Deal You Understand<\/a> (Jul. 16, 2018).<\/p>\n\n\n\n

Photo credits: Andrea Piacquadio<\/a>, via Pexels. <\/p>\n","protected":false},"excerpt":{"rendered":"

You start off the marketing and sale of your home with a listing agreement. This document controls all the terms of the sale. It sets the keynote for a string of important decisions and legal agreements. In this article, we\u2019ll discuss some recent news about listing agreements, as well as the broad-brush concepts every seller […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-1472","post","type-post","status-publish","format-standard","hentry","category-general"],"yoast_head":"\nSelling Your Home? 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