Completing the Listing Agreement

Now that you have set the price to list your property, there are three more important items to decide before you can complete the listing agreement.

Duration of Listing

The seller and the agent together set the listing term. The listing term should be a function of market conditions such as the average time on the market of homes recently sold, the total number of homes on the market, fluctuations in interest rates and changing economic forecasts. Before deciding on a specific length of time for the listing, ask your agent for detailed information on homes recently sold in surrounding areas. Using this as a guide, determine a listing period that will give the agent a reasonable amount of time within which to sell the home. Although a 90-day listing is usually a minimum, in many parts of the country where the real estate markets are sluggish, a listing that stretches from 180 days to 360 days is not uncommon.

Property Description

The legal description of the property must be included in the listing to properly identify the real estate that will be included in the sale. This will include a precise description of the exact parcel or real estate that the real estate agent is authorized to represent as well as any other information about personal property that will accompany the sale.

It is generally a good idea to exclude personal property from the sale. Few people have the same tastes in home furnishings. Finding out that the living room furniture goes with the house could actually be a deterrent! Talk with your agent to determine local customs with regard to appliances, curtains and drapes, and lighting fixtures that could be considered permanently installed. Some government authorities actually require that certain appliances be sold with the house, so it is imperative that you are informed. It is usually better to withhold certain personal properties from the listing, using them as negotiating points once an offer is presented.

Compensation to the Real Estate Agent

When an agent signs a listing agreement, they do so with the expectation that upon the sale of the property they will be paid either a set fee or a commission. The amount is determined when the listing is signed. Many experienced agents have a set level of compensation that they will accept for their services, much like a lawyer or any other professional. Most often that compensation will be expressed as a commission rate that is calculated according the final sale price of the home. However, since the fees are not regulated they remain negotiable between the seller and agent.

It is expected that the fee will be paid at the settlement table unless other arrangements are made ahead of time. Very simply, the agent is obligated to see that the house is sold at a price that the seller noted in the listing agreement or later authorizes, while it is the obligation of the seller to pay once the house does sell. The agent can expect payment if the house is sold within the listing period, regardless of who originated the actual buyer. The agent can also expect to be paid if a qualified buyer presents a full price offer that is rejected by the seller, for whatever reason. It is therefore important that the seller be committed to selling prior to signing the agreement.