Once you have found a real estate agent to list your home, you will be presented with a listing contract. Prior to signing this paperwork, it is helpful to understand what it encompasses. The information on listing contracts below will help you to be a better educated seller.
Commission is generally specified as a percentage of the selling price. There is no standard commission rate and all rates are negotiable. Each agent and firm sets their own fees and, similar to everything else in real estate, it may be changed. It is important to understand the expertise and value provided by individual professionals and firms when comparing their rates. Merely selecting one with the lowest fee may not actually be the best choice.
Listing professionals usually share a specific percentage of the fee with co-broker agents (buyer agents). The percentage is shown in the MLS system. Though frowned up, higher percentages can influence buyer agents to promote your home and, likewise, low amounts can discourage other agents. This is particularly true when listing volume is high. Be sure to ask what the amount will be if it is not mentioned.
Finally, the contract also indicates when the fees are officially earned. This is very important. Your contractual obligation to your listing agent is different from that to any other parties. Therefore, it is not necessarily based on a closing.
You must authorize your agent to manage specific tasks. The most obvious one is to enter the details of your property into the local MLS (multiple listing service). This is the service that networks the listing to all real estate agents and to a variety of authorized websites. By expanding the exposure of your listing, you will increase the likelihood of selling and for a higher value. Adding signs, installing a lockbox, and performing open houses are other services that you may be asked to sign off on in the listing contract.
Real estate professionals are not just salespeople. They are actually agents in the legal definition and have distinct obligations under the law. These are referred to as fiduciary duties and include care, obedience, accounting, confidentiality, diligence, disclosure, and loyalty. In general, your real estate professional must work for you and protect your best interests at all times.
The information on listing contracts in this article include only the most typical components of listing contracts and may not address all language in your specific contract. As with any type of contract, review the full document, inquire about anything that is not clear, and seek additional help if you would like legal advice.