Subject: Here's What You Need To Know About the Listing Agreement Part II: The Details of the Contract
In Part I, I discussed how you'll need to complete a listing agreement with your real estate professional. Each of the four types of standard agreements-Exclusive Right to Sell, Open Listing, One-time Show and Exclusive Agency-is a legally binding contract that authorizes a broker and her sales associates to produce a buyer for a home, according to the conditions specified in the contract.
Depending on the type of listing agreement, you can expect to see most of these terms detailed in the document.
· Terms of the Agreement
The length of time the contract will be in effect typically runs anywhere from 30 to 90 days, depending on the local market. Since a contract can be extended before it expires, you may not want to lock yourself into an automatic extension.
Under Terms of the Agreement, you'll also find the price of the home. You and your real estate professional should arrive at the home's market value after considering the Comparative Market Analysis (prepared by the agent) and other factors.
· Commission
It may come as a surprise that commissions are not set by the industry. Real estate professionals expect to earn between 6% and 7% of the sale price, depending on what's customary in the area. If another agent finds a buyer, the commission is split between agents. Although commissions are negotiable, this practice tends to be reserved for special circumstances. For instance, if a real estate professional knows of an interested buyer, this would eliminate the need to market the home. To close the deal, he may be willing to cut his commission.
· Multiple Listing Service (MLS)
This section authorizes a real estate professional to list your home with the MLS. An MLS listing gives your home greater visibility and even exposes it to Internet users. Of course, you have the right to opt out of listing with the MLS. But why should you, when it can dramatically increase the chances of selling your home.
· Lockbox
This hollowed-out padlock or miniature safe holds a key to your home. The lockbox, which usually gets attached to the front door, allows easy access for anyone showing the home. Only a person with the combination or with an electronic key can gain entry.
· Description of the Property and Its Condition
Here you'll find a description of the property and its general condition as well as the condition of its major systems-mechanical, plumbing and electrical. Along with the description should be a list of the items that will stay with the home, for instance, the washer and dryer, and those you intend to remove such as a light fixture.
· Marketing Plan
Kiplinger's Buying and Selling a Home (Kiplinger Books, 2000) suggests adding the marketing plan as an addendum to the listing agreement. The marketing strategy should be structured to cast a wide net and might include advertising, open houses, the multiple listing service, signage, fact sheets, and so on.
"Real Service in Real Estate." For a personal consultation on buying or selling real estate, Janis Peterson, GRI, CSP Realtor® can be reached at (610) 642-3744, e-mail: jp4re@pahomes.com. Prudential Fox & Roach Realtors® is an independently owned and operated member of The Prudential Real Estate Affiliates, Inc.
