If you decide to work with a real estate agent to sell your home, you will need to sign a listing agreement. The name and format of this document may vary in different states; in any case, the document spells out the terms of your listing contract – what the agent will do for you and what you agree to do for the agent, including payment terms. You have the ability to add terms to the listing agreement if you want to.
1. Seller's Duties And Representations. The BROKER is granted the exclusive right to sell the PROPERTY, as the SELLER'S agent, during the term of the Agreement and the SELLER agrees to refer all inquiries to the BROKER, to cooperate in marketing the PROPERTY, including completing lead paint (if property built before 1978) and other forms. If the PROPERTY is sold to a buyer procured by the BROKER, by the SELLER or by anyone else, the fee described in paragraph 4 shall be due. The BROKER is authorized, but is not required: (a) to offer compensation to other licensed brokers as buyer's agents or facilitators; (b) to place a listing for the PROPERTY in any multiple listing service; (c) to place a sign on the PROPERTY; (d) to photograph and advertise the PROPERTY in such media as the BROKER may select; and (e) to place a lock box on the PROPERTY. The SELLER authorizes the BROKER to disclose to prospective buyers all information about the PROPERTY provided to the BROKER by the SELLER, all of which the SELLER represents to be accurate. The SELLER acknowledges receipt of a Mandatory Licensee-Consumer Relationship Disclosure form. According to the Code of Ethics and Standards of Practice of the National Association of REALTORS®, the SELLER has been advised of (1) the broker's general company policies regarding cooperation with and compensation to subagents, buyer's agents and facilitators; (2) the fact that a buyer's agent, even if compensated by the listing broker or seller will represent the interest of the buyer; and (3) any potential for the listing broker to act as a disclosed dual agent on behalf of the seller and buyer. The SELLER agrees to comply with all applicable fair housing laws.
2. Listing Price. The listing price for the PROPERTY shall be ___________________ dollars or such other price and terms as the SELLER may approve.
3. Listing Period. This Agreement shall begin on ________________________________ and end on ________________________________________________ and may be extended by agreement.
4. Broker's Fee. If within the term of this Agreement or any extension the PROPERTY is sold or the BROKER procures a buyer who is ready, willing and able to buy at a price and on the terms set forth herein or on such other price and terms as the SELLER may agree, the BROKER shall be due a fee of _______ percent of the selling price. Said fee shall be paid at the time set for closing and may be deducted from amounts held by BROKER as escrow agent. The aforesaid fee shall also be due upon sale within _____ months after expiration of this Agreement or any extension to any person who is introduced to the PROPERTY during the aforesaid term or any extension, except if the SELLER has entered into an exclusive agreement with another broker in good faith.
5. Broker Cooperation. BROKER hereby advises SELLER that BROKER will offer compensation to cooperating real estate licensees as follows: buyer's agents ___________% of the selling price; facilitators (non-agents) __________% of the selling price. If subagency will be offered, Consent To Subagency form must be signed.
6. Broker's Duties. The BROKER agrees to use reasonable efforts in marketing the PROPERTY and agrees to list the PROPERTY with the ________________________ multiple listing service. The BROKER shall have no obligation to continue to market the PROPERTY after an offer has been accepted and shall have no obligation to present any offer once an offer has been accepted and while a transaction is pending. The BROKER is not hired as a property inspector, tax advisor or attorney and if such services are desired SELLER should hire professionals.
7. Consent To Designated Agency. A designated agent is a real estate licensee who has been appointed by a broker or salesperson to represent a buyer as a "designated buyer's agent" or to represent a seller as a "designated seller's agent." When a buyer or seller consents to designated agency only that designated agent represents the buyer or seller. Any other agents affiliated with BROKER may represent another party to the transaction and by consenting to designated agency the buyer or seller permits those agents to represent another party. Individuals who are designated agents owe fiduciary duties to their respective clients. SELLER is further advised that: (a) the designated seller's agent will represent the SELLER and will owe the SELLER the duties of loyalty, full disclosure, confidentiality, to account for funds, reasonable care and obedience to lawful instruction; (b) all other licensees affiliated with the appointing BROKER will not represent the SELLER nor will they owe the other duties specified in paragraph (a) to that SELLER, and may potentially represent the buyer; and (c) if designated agents affiliated with the same broker represent the SELLER and buyer in a transaction, the appointing broker shall be a dual agent and neutral as to any conflicting interests of the SELLER and buyer, but will continue to owe the SELLER and buyer the duties of confidentiality of material information and to account for funds. By signing this agreement, SELLER consents to designated agency. If BROKER is a designated agent for buyer and SELLER in a transaction, a notice will be given. The designated agent(s) for the SELLER is/are:
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What is a home listing?
When you list your home for sale, what you're really agreeing to do is hire a particular agent and his or her brokerage firm to market your property for sale for a particular time period. The listing agreement is your contract with that brokerage firm. Once you list your house with that firm, it's difficult to change anything until the listing expires. If you signed an exclusive listing agreement (the most common kind of listing) you are granting that brokerage an exclusive right to sell your home. This means the brokerage "owns" your listing and has the exclusive right to that listing for the term of the agreement. Here's an example: Let's say that you signed an exclusive listing agreement with Centurion 42 brokerage for 6 months. A week after listing your home, you find a co-worker at your company who is interested in moving to your neighborhood. You must immediately refer them to your real estate agent, because their brokerage has an exclusive right to market your house – you do not have the right to market your own house! When negotiating the listing agreement, you can ask to add language that allows you the right to find your own buyer, and either reduces or eliminates any commissions due if you find your own buyer. Many real estate agents, however, will not agree to such language. Here is an example of an exclusive listing agreement. Pay particular attention to the highlighted areas. This example is from the Massachusetts Association of REALTORS®:
EXCLUSIVE RIGHT TO SELL LISTING AGREEMENT
[With Consent To Designated Agency]
I/We ________________________________________________ ("SELLER"), hereby grant to __________________ ______________________________, a real estate broker licensed under the laws of the Commonwealth of Massachusetts ("BROKER"), the exclusive right to sell the property described as ____________________________________ and recorded in the ___________________ County Registry Of Deeds at Book _______, Page _______ ("PROPERTY") on the following terms and conditions:[With Consent To Designated Agency]
1. Seller's Duties And Representations. The BROKER is granted the exclusive right to sell the PROPERTY, as the SELLER'S agent, during the term of the Agreement and the SELLER agrees to refer all inquiries to the BROKER, to cooperate in marketing the PROPERTY, including completing lead paint (if property built before 1978) and other forms. If the PROPERTY is sold to a buyer procured by the BROKER, by the SELLER or by anyone else, the fee described in paragraph 4 shall be due. The BROKER is authorized, but is not required: (a) to offer compensation to other licensed brokers as buyer's agents or facilitators; (b) to place a listing for the PROPERTY in any multiple listing service; (c) to place a sign on the PROPERTY; (d) to photograph and advertise the PROPERTY in such media as the BROKER may select; and (e) to place a lock box on the PROPERTY. The SELLER authorizes the BROKER to disclose to prospective buyers all information about the PROPERTY provided to the BROKER by the SELLER, all of which the SELLER represents to be accurate. The SELLER acknowledges receipt of a Mandatory Licensee-Consumer Relationship Disclosure form. According to the Code of Ethics and Standards of Practice of the National Association of REALTORS®, the SELLER has been advised of (1) the broker's general company policies regarding cooperation with and compensation to subagents, buyer's agents and facilitators; (2) the fact that a buyer's agent, even if compensated by the listing broker or seller will represent the interest of the buyer; and (3) any potential for the listing broker to act as a disclosed dual agent on behalf of the seller and buyer. The SELLER agrees to comply with all applicable fair housing laws.
2. Listing Price. The listing price for the PROPERTY shall be ___________________ dollars or such other price and terms as the SELLER may approve.
3. Listing Period. This Agreement shall begin on ________________________________ and end on ________________________________________________ and may be extended by agreement.
4. Broker's Fee. If within the term of this Agreement or any extension the PROPERTY is sold or the BROKER procures a buyer who is ready, willing and able to buy at a price and on the terms set forth herein or on such other price and terms as the SELLER may agree, the BROKER shall be due a fee of _______ percent of the selling price. Said fee shall be paid at the time set for closing and may be deducted from amounts held by BROKER as escrow agent. The aforesaid fee shall also be due upon sale within _____ months after expiration of this Agreement or any extension to any person who is introduced to the PROPERTY during the aforesaid term or any extension, except if the SELLER has entered into an exclusive agreement with another broker in good faith.
5. Broker Cooperation. BROKER hereby advises SELLER that BROKER will offer compensation to cooperating real estate licensees as follows: buyer's agents ___________% of the selling price; facilitators (non-agents) __________% of the selling price. If subagency will be offered, Consent To Subagency form must be signed.
6. Broker's Duties. The BROKER agrees to use reasonable efforts in marketing the PROPERTY and agrees to list the PROPERTY with the ________________________ multiple listing service. The BROKER shall have no obligation to continue to market the PROPERTY after an offer has been accepted and shall have no obligation to present any offer once an offer has been accepted and while a transaction is pending. The BROKER is not hired as a property inspector, tax advisor or attorney and if such services are desired SELLER should hire professionals.
7. Consent To Designated Agency. A designated agent is a real estate licensee who has been appointed by a broker or salesperson to represent a buyer as a "designated buyer's agent" or to represent a seller as a "designated seller's agent." When a buyer or seller consents to designated agency only that designated agent represents the buyer or seller. Any other agents affiliated with BROKER may represent another party to the transaction and by consenting to designated agency the buyer or seller permits those agents to represent another party. Individuals who are designated agents owe fiduciary duties to their respective clients. SELLER is further advised that: (a) the designated seller's agent will represent the SELLER and will owe the SELLER the duties of loyalty, full disclosure, confidentiality, to account for funds, reasonable care and obedience to lawful instruction; (b) all other licensees affiliated with the appointing BROKER will not represent the SELLER nor will they owe the other duties specified in paragraph (a) to that SELLER, and may potentially represent the buyer; and (c) if designated agents affiliated with the same broker represent the SELLER and buyer in a transaction, the appointing broker shall be a dual agent and neutral as to any conflicting interests of the SELLER and buyer, but will continue to owe the SELLER and buyer the duties of confidentiality of material information and to account for funds. By signing this agreement, SELLER consents to designated agency. If BROKER is a designated agent for buyer and SELLER in a transaction, a notice will be given. The designated agent(s) for the SELLER is/are:
[insert name(s) of agent(s)]
8. Additional Terms. ____________________________________| Dated: __________________ | ___________________________________ |
| SELLER Or Authorized Representative | |
| ___________________________________ | ___________________________________ |
| BROKER Or Authorized Representative | SELLER Or Authorized Representative |
Be specific about expected services from the agent in the listing agreement
Be sure to specify in the listing agreement what services you want the agent to provide. Are they supposed to advertise your home every day in the newspaper (unlikely)? Have an open house each weekend until the house is sold (impractical)? Send a follow-up email to every person who looks at your house? Make sure those items are written in your listing agreement, or they may not be performed by the listing agent.Be aware that the more services you request, the more the agent is likely to increase the rate they charge. Advertising is very expensive. If you really want your home advertised in a lot of places (periodicals, websites, etc.), you or your agent will have to bear that cost. If the listing agent is paying for all advertising, and they are not receiving any payment until closing, that agent will have to charge you a hefty price. The agent is essentially loaning you money to advertise your home until closing. Worse yet for the agent, they run the risk that your home does not sell, leaving the agent stuck with the bill for marketing costs.
In a full-service, full-commission paid at closing listing scenario, you are paying more for the privilege of having "insurance." If the home doesn't sell, you owe nothing and you don't have to reimburse the agent for the money they spent marketing your home. If your home does sell, you pay the agent's fee (the "commission") at closing. Because typical full-service, full-commission agents lose money providing "insurance" to clients whose homes do not sell, those agents must charge everyone more in commissions. The commissions from the homes that do sell must pay to cover the losses of money and time for the homes that do not sell during the agent's listing period.
You may be able to reduce your overall costs by paying for some of the advertising costs up front. You could order marketing materials and pay bills yourself, or you could provide your agent with a non-refundable deposit. You could specify in the listing agreement that your agent must use those funds for advertising. Ask your agent if they would reduce their fee in return for you paying for the advertising costs.
Setting your home's sales price and the agent's commission
The listing agreement is also where you specify the initial listing price for selling your house and the amount of the agent's total commission, including the amount paid to a buyer's agent. You can change your price as noted elsewhere in this document, but not the commission rate or commission split.
Listing term - How long does the agreement last?
You can set the listing term (the amount of time for which the agent is committed to represent your house) for whatever period of time you want. This term is written into the listing agreement. Your listing agent will likely want the longest possible term, to provide them with the largest likelihood of selling your house (and earning a commission). You may want a shorter term, providing you with the ability to change listing agents quickly if you feel that your agent is not performing well.According to noted industry columnist Bob Bruss, you should interview three or more real estate agents before hiring one, and agree to a listing term of no longer than 90 days. After 90 days, you can either renew the listing with the same agent for an additional time period, or list with a new broker/agent.
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