Space Intown, REALTORS® April 25, 2023
This is the most common type of listing agreement. As defined by the National Association of REALTORS®, an exclusive right-to-sell listing agreement is a contractual agreement under which the listing broker acts as the agent or as the legally recognized non-agency representative of the seller, and the seller agrees to pay a commission to the listing broker, regardless of whether the property is sold through the efforts of the listing broker, the seller, or anyone else.
To put it simply, you’ll be working exclusively with one agent to sell your house within a definite period of time. The broker is entitled to their commission regardless of who sells the property, as long as the listing agreement is in effect.
This type of listing agreement, it’s similar to an exclusive right-to-sell listing where the broker acts as the agent and any agent in the agency may sell the property and collect the commission. But in this case, the seller still reserves the right to sell the home on their own if they choose. And if the property is sold solely through the efforts of the seller, he or she is not obligated to pay a commission to the listing broker.
This is a non-exclusive agreement that allows the seller to use multiple real estate agents to sell their home, but the agent who sells the home is the only one who gets a commission. If the homeowner succeeds in selling the home themselves, the agents walk away empty-handed, which is why these kinds of agreements are less common and are generally less favored by agents.
Here are the main components of a listing agreement:
Contact information - includes names, phone numbers, addresses, and other information for the seller and the real estate broker or agent.
Property description - the listing agreement will include a complete and accurate description of the property. The property description also specifies any fixtures that will be left behind after the property is sold, and which items will not be included in the sale and you'll be taking with you when you move.
List price - You and your agent will discuss the listing price ahead of time, which is based on market data, comparable homes that have sold in the area, and the condition of the home. The price should be written in the agreement to match your earlier discussions.
Agreement duration - a listing agreement usually covers a duration of between three and six months, although it can last for any amount of time you and your agent agree on.
Agent duties - the agent’s responsibilities and detailed plan of action will be specified in this section, together with the activities the listing agent is authorized to conduct on your behalf. This may include holding open houses, listing your home on the MLS, posting a yard sign, etc. Understanding the agent’s responsibilities will give you a clear idea of what they will (and will not) do during the selling process.
Agent commissions - the commissions, fees, and other compensation need to be added to the agreement. Agent commissions are usually between 5 percent and 6 percent of the proceeds of the sale, and are usually split halfway with the buyer’s agent.
Mediation and conflict resolution details - this part of the document states how any potential disputes between the property owner and agent will be resolved. It will specify whether conflicts will be settled using mediation or arbitration, lowering the risk of escalating conflict into a legal dispute.
Protection clause - when the agent shows the house to a potential buyer during the listing agreement period, but that person doesn’t buy the property until after the listing agreement has expired, the protection period clause in the agreement will protect the real estate agent from losing their commission.
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