Home Selling: Understanding the Listing Agreement
Airfare Daily Deals eCigarettes Eyeglasses Hotels Jewelry Online Backup Online Dating Online Printing Online Tickets Skin Care Textbook Rentals Vitamins Web Hosting Weddings
Find thousands of shopping-related forums
SEARCH

Home Selling: Understanding the Listing Agreement

According to the Statute of Frauds, most things involving real estate must be in writing to be enforceable. Hence, an agent will want you to sign a written listing agreement. This agreement may be several pages long and you should check it over carefully, perhaps even have your attorney look at it before signing it.
              listing agreement

Image Credit

There is nothing illegal about an oral listing. However, an agent can't compel you to pay a commission based on it. According to the Statute of Frauds, most things involving real estate must be in writing to be enforceable. Hence, an agent will want you to sign a written listing agreement. This agreement may be several pages long and you should check it over carefully, perhaps even have your attorney look at it before signing it. Some of the areas to be concerned about include:

  • A specific start and termination date: You want this date written in, not just something such as "for three months."
  • The conditions under which you will pay a commission: For example, many listings say you owe a commission when the agent finds a buyer, "ready, willing, and able" to purchase. That can mean that while you don't have to sell such a buyer, even if you don't sell, you could owe a commission. Some sellers have taken to changing the wording to say that a commission is due only upon the successful close of escrow (sale of the property to a buyer).
  • The amount of the commission: Usually it's a percentage of the sale price.
  • The amount of the deposit you want: In today's market, with deals typically not solidified until weeks after the purchase agreement has been signed, a large initial deposit is not usually necessary. But, you may require the buyer to increase the deposit after the contingencies have been removed.
  • Who gets the deposit: Yes, it's your money and so the listing should state. However, what happens if the buyer doesn't go through with the purchase and the deposit is forfeited? In that case, most listings specify that it's split between the agent and seller. To keep everyone else in the deal from worrying, the deposit is usually held by a neutral escrow, although technically, it's usually yours as soon as the sale agreement is signed.
  • The terms you want: Do you want all cash? Are you willing to carry a second mortgage in favor of the buyers? Careful of what you put here. If the agent brings in a buyer who meets your criteria, you might owe a commission, even if you later decide you don't like those terms.
  • The name of the agent: If the agent is a salesperson, typically he or she will sign for their broker. The broker may need to check over the listing and sign it to make it "official."
  • What your obligations are: Are you required to do any of the selling or paperwork? Do you have to show the property? Do you have to maintain it in any specific kind of condition?

Need an answer?
Get insightful answers from community-recommended
experts
in Home Selling on Knoji.
Would you recommend this author as an expert in Home Selling?
You have 0 recommendations remaining to grant today.
Comments (0)
ARTICLE DETAILS
RELATED ARTICLES
ARTICLE KEYWORDS