So you’ve decided to sell your home, and you’ve settled on a real estate agent to represent you. The next step is to draw up a real estate listing agreement with your agent.
The listing agreement has to two purposes. First it gives your real estate agent the authority to act on your behalf and find a buyer for your property. Secondly it outlines the details of the property and covers the terms and the conditions of the sale.
A legally binding contract, it’s worth taking a moment to read it carefully to make sure you fully understand what you’re signing.
TYPES OF REAL ESTATE LISTING AGREEMENTS:
There are two types of real estate agreements: exclusive and multiple listing.
An Exclusive Listing Agreement gives the real estate agent the exclusive right to find a purchaser for your property. This is usually for a fixed time period (30-90 days) which can be renewed.
A Multiple Listing Agreement allows the real estate agent to list the property on a multiple listing system (MLS). A computerized real estate listing system, it’s available to all participating real estate board members. It’s like having a team of real estate sales professionals working on your behalf. The time period is usually 60 days although that is negotiable.
COMPONENTS OF THE LISTING AGREEMENT:
Most real estate listing agreements are standard, pre-printed forms with all of the expected wording and clauses. There are blank sections however, that need to be filled out by the vendor and the real estate agent.
The Property Tangibles:
Every listing agreement has to set out the pertinent details of the property including:
- list price,
- legal address,
- a description of the type of property including such things as property dimensions, number and size of rooms, type of heating system, main recreational features, amenities etc.
- Any chattels or extra features (appliances, draperies, carpeting etc) that are included in the list price are also listed.
Other items generally included in the listing agreement include:
- mortgage details including balance, monthly payments and due date,
- the annual property taxes,
- any liens, rights of way, easements or other charges on the property.
This is the time to discuss ‘disclosure’ with your real estate agent. The vendor is obligated to report any relevant facts or material details that could either affect the sale of the property or influence a buyer’s decision to purchase.
Most post-sale disputes can be avoided if accurate and appropriate disclosures are made.
Defining the Real Estate Agent relationship:
The last part of the real estate listing agreement establishes the rights and obligations of both the vendor and the agent.
What you will see covered here are:
- the fee or commission rate,
- how the commission is earned and when it will be paid,
- the marketing opportunities your realtor plans to use,
- any additional services that your real estate agent agrees to provide.
Once you have come to an agreement on all the terms, the agreement is signed and witnessed, and you receive a copy.
Most listing agreements have a set terms (30, 90 days and 6 months) which is negotiable. Sometimes, the real estate agent inserts a cancellation clause, which pre-empts a need for an expiry date.
As with everything else in the listing agreement, it’s wise to heed the advice of your real estate agent while considering your comfort level.
Your real estate agent is your advocate and has your best interests at heart. Believe it or not, they want to sell your house for the best price, just as much as you do!
Our team of real estate sales professionals is committed to finding you, your dream home. Whether you’re looking to buy or sell, the Karen Paul team is here to help with any questions.