What is a Listing Agreement?

If you’re in the market to sell your home, you will most likely want to secure the services of a competent realtor and will need to sign a real estate agent contract. 

While you can sell your home without a Realtor, it’s always a good idea to have a real estate specialist on your side.

We understand that selling a property can be a daunting obstacle to overcome, especially with all the paperwork ahead. 

As mentioned, you will be required to sign a contract with your real estate agent, namely the listing agreement. But what is a listing agreement?

What is a listing agreement? 

For you and a real estate agent to move forward with your professional relationship, you will need to sign a legal real estate agent agreement. 

The contract is legally binding and it gives your real estate agent the right to sell your property. There are quite a few types of listing agreements, some with a number of unique clauses. But there are three most commonly used listing agreements. 

Exclusive right to sell listing

As real estate agreements go, this is the most common. The exclusive right to sell listing is an agreement between the homeowner and realtor that allows the real estate agent (or brokerage) full and total control over the transaction and rights to the agreed-upon commission. This realtor commission is paid once the home is sold.

Outlined in this contract is the right to market the house, list the home on MLS, and receive the commission if they sell the property, within the determined time frame. 

It’s always wise to read the contract closely as if there are any issues or mistakes it can affect the outcome of the sale of the home. This includes how much your agent is paid, so it’s important not to miscalculate the percentage, otherwise, it can affect your take away from the sale. 

Exclusive Agency Listing

An exclusive agency listing you, the homeowner, will allow only one real estate agent or broker to sell your property. 

While there is a single agent, you can still locate your own buyer, cutting them out of commission. But this isn’t always the case, just remember to read the fine print. 

If you’re looking at selling your home fast, this might not be the best route, as agents might be less motivated to sell your property if there’s no guarantee they’ll receive their commission. 

The last type of agreement is an open listing. 

Open Listing 

While the last two agreements focused on a single agent, this allows for a number of realtors. 

The real estate agent who can bring you a buyer will land the commission, and if the owner can sell the home, you pay no one. 

An open listing agreement is not a contract most real estate agents will take, as investing time in marketing your property could feel like a waste. Especially if anyone can swoop in and take the commission. 

This means that agreeing to an open listing might mean you’re selling your home without a realtor. 

But what’s actually in the listing agreement?

What’s in the listing agreement document? 

Listing agreements, especially the exclusive listing agreement, involve everything you could possibly imagine. 

They will list items and concerns such as, what’s included in the sale of the property (appliances, lampshades, and pot plants), and the exact compensation the real estate agent is going to get out of the entire process. 

The agreement will lay out how your realtor can advertise your home. These can include using MLS, internet marketing, lockbox, and the classic “For Sale” sign. There can also be clauses that adhere to equal opportunity housing, lawyer fees, and dispute resolution and mediation. 

This contract will also grant permission and the right to use listing content. Listing content includes photos, graphics, videos, drawings, virtual tours, written descriptions, and any copyrightable elements relating to your property, which has been defined by the National Association of Realtors. 

As we mentioned above, it is important to read through all the details. But do you have to even sign this agreement? 

Can you work with a realtor without signing? 

To ensure that both parties are completely happy, it is crucial that you sign the listing agreement. If you do decide to list your home as a for-sale-by-owner (FSBO), you won’t need to sell your house with a realtor. But it is a lot of work. 

Now that we’ve confirmed that you should sign the listing agreement, when is it suitable to enter into this arrangement. 

When does this contractual agreement start? 

A short answer to this question is whenever you, as the homeowner, are comfortable. If you’re completely happy to sign on the dotted line at the first meeting, then that’s when you should sign the listing agreement. 

If you want to investigate your options, that is entirely up to you to decide. But this being said, if you’re looking at selling your home as soon as possible, the sooner the better. 

And you can agree on an expiration date if needs be.

How long does this agreement last? 

As mentioned above, there is often an expiration date for this contractual agreement. The timeframe can vary for a number of reasons. These include: 

• Condition of the home

• Real estate market

• And the homeowner’s needs.

But as a rule of thumb, these listing agreements last between two to six months from the time the property is listed. This again can change if the homeowner is in another state. 

This date can be negotiated with your realtor. If you were wondering what happens when a real estate contract expires? You can extend it or go your separate ways. 

But what else can you change in this listing agreement? 

What can you negotiate?

We’ve discussed how you can negotiate the expiration date,  but this isn’t the only element up for discussion. Here are some common things you can negotiate in a listing agreement. 

Commission 

The normal commission rate across the USA is between 5% and 6% of the selling price. This percentage can be split between real estate agents if there is a real estate agent with the buyer. 

Negotiating to lower this percentage will save you money, but it will dramatically reduce enthusiasm from the realtor. By lowering their fee, you do open yourself to an agent who put forward the proper effort to sell the house fast. Even though this is unethical, we can’t guarantee they will give you the service you require. 

Type of listing

You can tell the realtor what type of listing you want for your property. While this power is signed away in the usual exclusive right to sell agreement, you can negotiate a different agreement. 

This being said, you will be limiting the agent and hampering the progress of your sale by doing this. 

Listing Price

While most agents will give you a recommended listing price, you can push back. It’s worth mentioning that the realtor should have a better idea of the pricing in the area, but if you’re determined on a price you can negotiate for it. 

Duties

We all take for granted the role of a real estate agent. Normally they are responsible for listing the address, posting signs around the neighborhood, and creating a call list for potential buyers. But if you’re keen to take over some duties, you can negotiate. 

Now that we’ve covered what is negotiable, let’s highlight the top red-flags that you’re about to sign a bad listing agreement. 

Listing Agreement Red Flags

This is a binding contract, so you will need to make 100% sure you’re signing an agreement that won’t hurt you. 

Our top seven tips are as follows: 

• Does the agent have a real estate license? It’s just a formality, but you can never be too careful 

• Are they a full-time real estate agent? There are part-timers in the market, but with any profession, you want the best. 

• Can they provide recommendations? Like anything, make sure that they have positive client reviews of their services. 

• Are they asking for cash upfront? If they are, this isn’t normal, and you should automatically walk away. 

But what happens if you’ve signed on the dotted line and you’re wondering, “How to terminate a real estate listing agreement?” 

Just like any other contract, you are allowed to discuss closing a contract. If they’ve violated the terms of the contract, you can forcefully cancel it. 

If your issue is just with the particular agent, you can talk to the brokerage and change realtors. 

But what if this is all too much. And you’re tired of dealing with realtors and just want to sell your home for cash now?

Sell your house to House Buyer of America 

We buy houses for cash and are always looking to buy homes in sell house fast in Maryland, virginia house buyers, and the Washington DC area. If you are interested in selling your home without the realtor complication and without having to negotiate the listing agreement, we are the solution you’ve been looking for. 

House Buyers of America buys homes ‘as is’, so no need to pour your money into fixing it up. 

And because House Buyers of America purchases all their properties in cash, it is a fast and hassle-free sale for you. 

Once you’ve called our office or fill out our online form, you’ll receive a cash offer in a few minutes, after which you can arrange a time for us to come by the house to finalize that important paperwork, and the money will be in your account in days. 

Call us today at 855-659-3289 or use our online form to get started! We’ll get you a cash offer within 10 minutes and walk you through the process of selling your house for cash.