When you put your home on the market, you are expected to sign a legally-binding contract, also known as a listing agreement. The listing agreement gives the listing agent specific rights and defines terms of your selling relationship. This includes the conditions and amount of the sales commission, which is the percentage of the home's selling price for the real estate agent. When you're ready to put your home on the market, here's what you should know.
Understanding Listing Options
There are three basic types of listing from which you can choose: exclusive right to sell listing, exclusive listing and open listing.
- Exclusive right to sell means if an agent other than the one listed sells the home during the time specified on the listing agreement, the listing agent splits the commission with the other agent. The agent also receives commission if you sell the home yourself.
- Exclusive listing is one where if you sell your home yourself, you may not have to pay a commission to the listing agent. This can vary by state.
- Open listing is one where you list your house with a number of agents, and the first one to sell the home gets the commission. If you sell your house, you don't pay commission.
Consider Hiring An Attorney
A listing agent may suggest that you sign a standard listing agreement used by the real estate firm for which he or she works. You can do that, or you can have special provisions added into the agreement. If you plan to make changes, you may want to hire an attorney to draft the listing agreement for you and ensure your wishes are legally secure and binding. If you sign a standard agreement, it is still a good idea to have an attorney look over it first.
Hiring an attorney also has other benefits for you. He or she can suggest changes you might want to consider adding to the standard agreement to make it more fair for you, and even negotiate the suggested changes with the firm. Some standard agreements entitle the agent to a commission if he or she finds a willing buyer for the home, even if the sale doesn't actually go through. So, your attorney can help you negotiate the agreement and make changes so that you only pay a commission if the home sells.
It is important to know what goes into putting a house on the market and understand how the process works. If you are new to the dealing with real estate firms, look around and find a firm with which you feel comfortable, and if you feel overwhelmed with legalities, consider hiring a real estate attorney for assistance. If you need help finding an agent, contact a company such as Lambert Realty, LLC.