A listing agreement is a contract in which you hire a real estate firm to find a ready, willing and able buyer for your home in exchange for a set fee.
Four types of listing agreements:
With an “exclusive right to sell” agreement, you pay fee regardless of who produces the buyer. This fee covers many important services that the sales professional performs above and beyond finding a qualified buyer. Giving a real estate agent the “exclusive right to sell” your property does not mean that there will not be other agents involved. Your agent is the listing agent and part of his or her job is to market your home to other agents who work with buyers. Those agents will show your home to their clients. Regardless of who sells the home, even if you sell it yourself to a friend at work, your listing agent will earn a commission. An exclusive right to sell is the only type of listing an effective real estate agent will accept. This is because they have a reasonable expectation of earning back any money they spend on promoting and marketing your property.
In an “exclusive agency” listing, if you find a buyer, he or she is not obligated to pay the fee. If the sales professional finds a buyer, then the fee is paid to the real estate company. An “exclusive agency” listing allows an agent to list and market your home, guaranteeing them a commission if the house sells through any real estate agent or company. It also allows sellers to seek out buyers on their own. This is not a popular type of listing agreement. The reason is that there is not much incentive for agents to spend money marketing your home. If you come up with your own buyer, they have spent money they cannot earn back through the real estate commission. Plus, it is too easy for a greedy buyer to go around the agent and negotiate directly with the seller. If you find an agent willing to accept such a listing, do not expect too much from them. A good agent would never accept such a listing, and you probably want a good agent.
A “one-time show” is similar to an open listing in many respects, as it is most often used by real estate agents who are showing a FSBO (for sale by owner) to one of their clients. The home seller signs the agreement, which identifies the potential buyer and guarantees the agent a commission should that buyer purchase the home. This prevents the buyer and seller from negotiating directly later and trying to avoid paying the agent�s commission. As with an open listing, agents will not be spending money on marketing your home and it will not be placed in the Multiple Listing System.
Note: Your home could also be included in a multiple listing service (MLS) as part of an exclusive right-to-sell listing. MLS gives your home greater exposure in the marketplace.
Your Real Estate sales professional can help explain and navigate the many choices you now face in selling your home. With suggestions from your sales professional, you can better decide which type of listing agreement is right for your needs.
Gathering the Facts
Buyers want to know details; having the answers is a powerful sales tool. Your Real Estate sales professional will use the information you provide to answer questions, create an advantageous listing and devise an exciting marketing campaign that attracts the right kind of buyer for your home.
Help your sales professional by collecting or providing the following information:
- The legal description of the property
- The number of rooms and their sizes
- A list of things not attached to the house that you’re offering for sale, such as window treatments, carpet, fixtures, swing sets, etc.
- Past utility bills, property taxes and insurance
- Information about your mortgage, including the type, terms and assumability
- Financing assistance, potentially through your own lender
- Any liens against the property
- If you live in a condominium or a townhouse, include a copy of the association’s declaration, bylaws, and financial statement, monthly fee’s and special assessments
- Special items or improvements about the house (Point out things that may not be apparent on a walk-through)
- The positive points about your neighborhood, such as demographic information and proximity to services, shopping, schools and other areas
- Any defects that aren’t apparent (You should inform your sales associate about defects so a buyer can be informed)
Find the Right Buyer
When you’re selling a home, it’s vital to know where the potential buyers will come from. Statistics show that real estate professionals are the best single source for bringing buyers to a home. More often than yard signs, newspaper ads or any other type of advertising effort, it’s real estate professionals who will let buyers know about your home. The same is true of buyers from out of town. Nationally, more than one-third of all buyers come from out of town, so it’s vitally important for you to work with a real estate professional who can access all the out-of-town prospects. At Real Estate, we mobilize the real estate community to work for you.
In addition to mobilizing the real estate community and creating maximum exposure for your home, we will also work closely with prospective buyers. For instance, we know that a qualified buyer is better able to make an offer, purchase a home and complete the sale. Consequently, we’ll only begin with those prospects that qualify — the ones with the motivation, authority and financial resources to buy your home.
Though each agent has his or her own style, all Real Estate sales professionals possess one thing in common: extensive resources, family service expertise and support only Real Estate can bring to successfully marketing your home.