When listing your home with a REALTOR®, you will be required to sign an agreement. This document will outline all of the agreed upon terms, including the asking price of the property, the REALTOR’S® commission, length of the agreement, cancellation policy (if any) and other details that will govern how the listing is handled. As a homeowner, it’s important to choose the right listing agreement to fit your needs.
Evaluate Your Options
When you decide to sell your home, talk with several different REALTORS®. Speak with them over the phone, meet with them in person, ask for references or do anything that you can to get a feel for how they do business. In real estate, punctuality is a must. The REALTOR® that you choose should return your calls, answer your questions and should provide a listing agreement that coincides with any verbal agreements that you may have had regarding the listing. For instance, if you tell your REALTOR® that you only want to list your property for six months, make sure the listing agreement reflects six months and not one year or longer. In addition, make sure that your asking price is the same in the agreement as you agreed upon in earlier discussions.
Exclusive Right-To-Sell Real Estate Agreement
This contract is the most common in the real estate industry. With this agreement, the REALTOR® will earn a commission regardless of whether they sell the house or you sell the house yourself. Always make sure you understand what you are signing.
Open Real Estate Listing Agreement
This type of contract allows a homeowner to list with more than one REALTOR® in a non-exclusive manner. The agent responsible for presenting a buyer who purchases the property will receive the commission, which means REALTORS® will compete to see who can sell the house first. If the owner eventually sells the home without the help of a REALTOR®, they are not required to pay anyone a commission. An Open Listing Agreement is not common with REALTORS®, but it is one option to consider.
Exclusive Real Estate Agency Listing
This type of agreement requires that the homeowner list their property with only one real estate agency. Unlike an Open Listing Agreement, where the homeowner can list their property with multiple REALTORS®, an Exclusive Agency Listing entails only one agency being granted permission to list the home.
Read The Fine Print
Before signing any type of contract, homeowners must read over every detail to ensure that it represents the full agreement between themselves and their REALTOR®. Some things to consider include the length of the contract. Some REALTORS® prefer to have a minimum of one year to list a property, but the homeowner will have the option to negotiate. Some owners prefer a shorter term, such as one to six months.
Every real estate contract should outline a cancellation policy, which will provide details surrounding a release and/or fees and penalties. Some agents will offer a cancellation policy that allows the homeowner to cancel the contract by providing a 30-day written notice at any time.