It’s not only first homebuyers who feel like they’re stepping into the unknown when home-hunting – owners selling for the first time go through a similar experience.
The cost, process and complexity of selling their home often comes as a surprise, and there’s usually universal recognition of the need for help from a real estate agent.
The listing agreement with their agent is an important part of the process and should be explained to sellers in painstaking detail.
Most owners have no idea what goes into a listing agreement, or how they can influence its content or structure.
Appointing the right listing agent is a critical moment in selling your home.
You should conduct at least three interviews, having asked friends and family for recommendations.
Ultimately, the choice is yours. You should select a person with good neighborhood knowledge and a track record of selling your style of property. Strong negotiation skills are essential, of course.
Most importantly, you should strike a good rapport and feel you can trust their guidance and judgment. I’d be delighted for the opportunity to help you.
No matter who you choose, you’re going to be asked to sign a listing agreement.
So, let’s step through it the most common type – an “exclusive right to sell” listing agreement.
Bottom line – A listing agreement is a legal document that represents a contract between you and your agent during the course of selling your home.
The details – The agreement should include the listing price, property details and marketing responsibilities and costs. It should also cite an exclusive right to sell and agency exclusivity.
Commissions – You should pay attention to the detail, of course. A watch-out for how your rights are protected and the way the agent is remunerated. The contract will enforce a period of agent-exclusivity, which is usually 90-180 days. And an agent might seek anything from 3%-6% of the sale value as a commission.
Responsibilities – Study the section that outlines what the agent and their agency will do for you. This will likely include photography, advertising design and maybe 3D tours.
Contract negotiation – There’s no such thing as a standard contract. You can negotiate the conditions, and it can be changed with mutual agreement.
Big brokerages – If your agent is part of a large organization, they will be tied into a standardized agreement, so getting modifications might be harder. That said, there shouldn’t be anything of substantial concern. After all, the big brokerages deal with hundreds of owners every day.
Listing duration – The contract should state the period for which it is valid.
Cancellation clause – This is designed to protect the agent and their agency. If the seller wants to stop the process before the expiry date of the agreement, there may be penalties because of sunk costs, such as photography and advertising.