A Real Estate Agent’s “Listing Agreement” will disclose how much commission your realtor is going to make from the sale. Depending on full service or partial service, all the expectations of what your agent is required to do will be in this agreement.
I’ve sold two single-family homes in the past and had to sign a listing agreement. I’ll summarize the main points in the next section that you want to carefully review before you sign!
The listing agreement is also your business contract (agreement) with the listing real estate agent! It documents exactly how they will handle the sale of your home and how it will be advertised!
Make sure you understand everything in the agreement because you’ll be obligated to work with your real estate agent for a specified (minimum) amount of time. If they are doing a lousy job, it will be hard to get out of the deal.
Common Listing Agreement “gotchas” That I Want You To Know About!
REMEMBER! Always seek out professional legal help. I’m not a lawyer.
Exclusive right to sell – Your agent has first priority for any rights relating to the sale of your home during the duration of time that is agreed upon. The duration of time is explained more below.
Duration of time – This is how long the listing agreement will be in effect. Typically, this can be three months, but I would do the shortest amount of time you can. That way if everything is going well with your realtor, you can just renew the agreement. If things are not going so well, you can always fire them.
Commission Amount – Your realtor will disclose the commission or any fees they’ll get paid once the home or property is sold.
Safety / Protection Clause – This prevents you from directly doing a sell to a buyer that the Realtor helped you find after the expiration of the listing agreement. This can be a very complicated matter so make sure you seek out the proper professional legal help if you are unsure of what it means in your particular case.
Representations – This will require you to show proof that you are a legal authority to sell the property. Again, pretty complex legal matters, so just make sure you have no conflicts with proving full ownership.
Duties – This part of the agreement will make sure specific duties are done. Such as listing your home on the MLS or doing an open house. Putting up a “For Sale” sign will also be listed in this section.
Dispute Resolution – This area describes how you handle disagreements that cannot be settled by just talking it out. It will contain the exact arbitration details you’ll need to go through to reach a resolution of the disagreement.
Changes to the agreement – This describes how changes to the agreement will be handled. Most of the time you can just add amendments.
Always use a bit of common sense and read the entire agreement carefully. Don’t be afraid to call out the realtor in an item that looks unfair or sneaky. Call them out on it, get it changed, or find a new Realtor to work with.
I’m curious…. Have you ever been screwed by a realtor’s listing agreement? Share your experience in the comments below.