Details of a Listing Contract
by RealEstate ABC
Obviously the name of the seller and the property address will be included in the listing contract. There are many other things that are included, too, and you should be aware of them.
Price and Terms of Sale
When setting the terms of sale, the main thing you are concerned with is the price. You should have a basic idea of what your home is worth by keeping track of other sales in the neighborhood. Plus, you have probably interviewed at least two real estate agents and they have given you their own ideas. Exercise great care in determining your asking price, making sure not to set it too high or too low.
In addition to the price, you will disclose what personal property, if any, goes with the house when you sell it. Personal property is anything that is not attached or fixed to the home, such as washers, dryers, refrigerators, and so on.
There may be some item that is considered "real property" that you do not intend to include in the sale. Real property is anything that is attached to the home. For example, you may have a chandelier that has been in your family for generations and you take it from home to home when you move. Since the chandelier is attached to the house, it is considered "real property" and a reasonable buyer would normally expect it to go with the house. The listing contract should make clear that it does not, and your agent should also enter this information with the Multiple Listing Service.
Real Estate Commission
In most areas there is a "customary" percentage that real estate agents expect to earn as a commission. Usually, it is six percent of the sales price. In some areas it can be as high as seven percent. However, just like anything else in real estate, this amount is negotiable. When completing the listing agreement, you and your agent will agree on the amount of the real estate commission.
The listing contract also specifies when the commission is earned. If a buyer presents an offer that meets your listing price and terms, the agent has effectively earned the commission. If a buyer presents an offer and you reach agreement on price and terms through counter-offers, the agent has also earned his or her commission.
Visit: Real Estate Commissions & Issues
Multiple Listing Service
Your listing contract should specify whether or not the house will be listed with the local MLS (multiple listing service). It is definitely in your interest to have the house listed. This is because your sales force is automatically multiplied by however many agents are members of the local MLS. If your house is not listed, then you only have one agent working for you instead of many.
Agency Duties of a Listing Agent
The listing contract will specify that your agent is acting as a "seller's agent." This means that, in the sale of your house, they are working for you and only you. However, there may be times when your listing agent has a client who wants to buy your home. For that reason, there is a little "wiggle room" in the listing contract. If your agent also represents the buyer, the listing contract should specify that they provide an additional disclosure that details their duties as a dual agent.
The contract also provides permission for your listing agent to act as an agent for others on other transactions. They can continue to list other properties, and represent buyers looking at other homes.
A lockbox is a basically a padlock with a cavity inside where a key to your home can be placed. Only someone with an electronic key or the combination can get into the lockbox and access the key. Having a lockbox available at your house makes it easy for other agents to get access to your house.
Without the lockbox, agents representing buyers would have to set appointments to meet you or your agent at the house so they could gain access and view the home. This would be inconvenient. Since almost every other house does have a lockbox available, if you do not allow one most agents will simply not show your property. You will miss out on lots of potential buyers.
The listing contract specifies whether you allow a lockbox or not. It is locked into place, usually on the front door and cannot be removed. Only other agents can access the key that is located within the lockbox.
Resolution of Disputes
There are times when you and your agent have a disagreement that you cannot resolve by yourselves. Maybe the agent did a poor job or misrepresented something. Maybe your agent was really doing their job correctly, but you did not understand. Perhaps the agent will have a dispute with you.
The listing contract specifies what methods will be used to settle such disputes. You can choose to accept binding arbitration, which is usually cheaper than hiring a lawyer and going to court. Usually, matters that can be dealt with in a small claims court are excluded from having to go to binding arbitration.
You are not required to sign or initial the binding arbitration clause.sÿ This would leave you free to hire an attorney and pursue disputes in civil court instead of binding arbitration.sÿ However, we are not recommending one choice or the other, as giving legal advice is not part of the services we offer at RealEstate ABC.
Copyright 2000 Terry Light & RealEstate ABC