Real Estate Listing Agreements: Which One Is Best for You?

If you are thinking of selling your house through a real estate agent, a

Real Estate Listing Agreement will be one of the first documents you sign. A listing agreement is a legally binding contract that identifies the extent of the roles and and responsibilities between you and the agent.

Although a

Real Estate listing Agreement can vary from place to place, a common

practice among listing agents to use boilerplate, industry standard forms.

No matter which agreement you decide to sign, read it carefully or consider

hiring a legal representative if you need to. Remember everything on a Real

Estate Listing Agreement is negotiable.

Common Real Estate Listing Agreements

There are three common listing agreements

or contracts, and the one you sign will determine the level of service,

rights and responsibilities that both you and your agent will agree to over

a set period of time.

Exclusive Right to Sell Listing Agreement -

The Exclusive Right to

Sell Agreement is the most common listing contract. The agreement gives the

selling agent an exclusive right to list and sell your home for a set period

of time. The commission you pay the agency will come at the time of closing

and is usually take out of the proceeds from the sale.

The agreement applies even if you find the buyer
yourself.
In the event that an agency other than the listing
agency sells the home, the listing agency typically splits its total
commission with the second agency.

Exclusive Agency Agreement - Almost identical to the Exclusive Right

to Sell Agreement, the Exclusive Agency agreement allows the seller to

retain the right to sell the property without paying a commission if the

buyer was not introduced to the property by the agency.

In the event that an agency other than the listing agency sells the home,

the listing agency typically splits its total commission with the second

agency.

Open Listing Agreement - An open listing agreement gives no single

agency exclusive right to sell the property. The seller can sell it himself

without paying a commission to anyone and can he can sign the agreement with

more than one agency.

If the seller does pay a commission, it's to the selling agency only. No

commissions would be shared in an Open Listing scenario.

Common Terms to Consider in Listing Agreements

Term of the Agreement - The term of the agreement sets the amount of

time that your agent will represent you and market your home. The longer the

agreement generally benefits the agent because it provides more time to find

a buyer for your house. In a weak market that may be okay, but in a sellers

market, you may not want to commit your self to one agent for an extended

period of time. but if homes are selling quickly, you don't want to be

committed to one agent for more than a few month. Consider how long home in

your area are typically on the market before they close when considering how

long to lock yourself into a listing agreement. If the house doesn't' sell

with the agreed time, you can always extend the period of time if you are

satisfied you're your real estate agent's work to date.

Commission -

Commissions are negotiable. The industry standard is

usually between 5% to 7%. Some real estate agents or agencies have policies

not to negotiate significant reductions in their commission schedules. When

interviewing agents compare what services each offers and compare what

commissions schedules the agent is willing to work on. A higher commission

rate doesn't always mean that the agent will market you house more

aggressively or more effectively than a discount commission broker. As the

commission rate can save you thousands or tens of thousand of dollars,

understand what services your will receive for the amount of money you will

pay at closing. Buyer's agent can find out how much commission is offered on

your home through the multiple listing service (MLS).

Multiple Listing Service (MLS) -

A listing agreement commonly

authorizes your agent to post your home in the MLS. There are few reasons

why you wouldn't want you home posted to the MLS as it is the single best

way for other agents and buyers to find your home. Most MLS listings are

picked up by Internet real estate directories that can be searched by

consumers.

Regional MLS systems often overlap into popular neighborhood. Understand

which MLS systems your agent will list your home and what timeframe it will

be listed. Also check to make sure the MLS systems where your home will be

listed will also be picked up by the popular Internet search engines. The

public does not have access to all the all the data that agents and brokers

can access.

Which Agreement Is Best for You?



Most agencies offer only the Exclusive

Right to Sell agreement. Before getting paid themselves, a good real

estate agent spends a great deal of time and money marketing and closing

their listings. The Exclusive Right to Sell agreement protects the

real estate listing agent's investment when marketing houses. Signing an Exclusive Agency agreement can be tricky because it leaves you the

option of selling the house yourself.

In reality, the seller rarely finds the buyer herself. But when it does

happen, there is the problem of which party gets the credit. Did the buyer

become aware of the house because of the sign out front or an ad on the

Internet? Signing an Exclusive Right to Sell solves this problem.

An Open Listing agreement will allow you to sign with many different

agencies, but there is little motivation on the part of a listing agent to

market the house since a commission is only paid to the selling agent.

Jeff Morrow

Get more real estate house selling advice and tips [we-list-homes-for-less.com/home-selling-guide.html] at We List Homes 4 Less [we-list-homes-for-less.com/index.html].

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