The Listing Agreement
Once you have decided to go with a agent and broker they will ask you to sign a listing agreement with them. The listing agreement is a binding legal contract so understand it before you sign it – consultant an attorney if necessary. This contract authorizes the broker to act as your agent by finding someone to buy your house. The contract contains two promises, first the broker will do their best to find a buyer for your property; second you promise to pay the broker a commission.
Your broker will generally ask you to sign an exclusive right to sell listing (PDF). This listing agreement gives exclusive listing to one broker to find a buyer for your condominium. If your property sells within the allotted timeframe you owe the broker a commission regardless of who sells it.
Keep in mind that listing contracts vary from place to place. However, most agents use established listing agreement forms that are the de facto industry standard in their area or are dictated by their brokerage company. Everything on these preprinted forms is negotiable.
Here are some terms to understand before signing the contact:
- Term of the Agreement: The general length of time for a selling agreement is 90 days. If the home doesn’t sell within the initial period and you’re satisfied with the agent’s efforts, you can offer to extend the term of the agreement before it expires.
- Commission: Although commissions are negotiable, most areas have a standard percentage rate of 6% paid by the seller.
- MLS: A listing agreement typically authorizes your agent to post your home in the Multiple Listing Service (MLS).
- Lockbox: A lockbox is a tiny key-holding safe attached to the front of your property so agents can show your home when you are not available. If you’re concerned about having your home shown when you are not their do not authorize a lockbox. But remember the more people who see the property the faster it will sell.