What is a listing contract? Many buyers are puzzled by all the legal
jargon associated with a sale and the listing contract is very important
to all parties involved. The contract is a written agreement between the
brokerage firm or its representative and the seller of the property.
The first thing you will notice is that it states this contract is an
exclusive agreement between the parties. This means the only agent you
are going to allow to represent your property on the market is the one
listed on the contract. It will be the brokerage firm/realtor listed on
line one, usually. What this means in plain English is that you will not
deal with other agents unless they go through your agent to contact you.
You will not let another agent or agency to offer your house for sale
under their logo.
Your property will be assigned a listing number. This is the number the
other real estate agents will be able to use to locate your property in
the multiple listing service (MLS) book. It is just like having an
inventory number for the home.
You will also notice on the listing agreement the date of the contract
as well as the expiration date. Usually there will be a three to six
month difference between the two dates. Most listing contracts are for
six month periods. But, you can discuss a shorter term. You can also
have a one day listing for a real estate agent if you are selling the
home on your own. This can happen when an agent is working with a buyer
who drove by and saw your house. The agent will not get paid a
commission if the buyer deals directly with you. Many times an agent
will approach a For Sale By Owner (FSBO) with a potential buyer and ask
for a one day listing agreement so that he or she may show the property.
The benefits to this are that the buyer is usually pre-qualified so
there is no problems with the deal falling through and the agent may
have a title company and mortgage broker already in place to close the
deal quickly.
When you have a listing agreement with a real estate agent you will also
have in writing everything that goes with the property. This may be
nothing but the building or include everything under the roof. You can
be specific. Usually things like window treatments and blinds,
appliances, lighting fixtures, and other things like this will stay when
you sell the home. However, if the chandelier in the dining room
belonged to great Aunt Mabel, you can have it excluded in the listing
agreement. Your agent will go over everything with you when you fill out
the contract.
One big matter is the commission which the real estate agent will earn
should he or she sell your home. This is usually around 5 to7%. Many
brokers also have a minimum commission they charge for their assistance.
The commission will always be the percentage or the minimum, which ever
is greater. It is also always paid by the seller. There is one key
detail which you must be aware of in this paragraph. If your house goes
off the market, for what ever reason, and you sell your home to a buyer
who learned about your house through the brokerage, you pay the
commission. In other words, you can not sell to �Mr. Smith� for six
months after the listing expired or was taken off the market if �Mr.
Smith� first came to your home because of your agent. If you do, then
you still owe the commission to the brokerage.
Remember the listing agreement is an agreement. You can discuss the
terms when you fill it out to what you feel is fair. Talk with the
broker to find out what works best for you both.
Return to Brokerforyou's real estate articles