Your home is ready for sale. You’ve found your ideal real estate agent and are more ready than ever to sell your home…but first, you’ll need to sign a listing agreement.
A listing agreement is an enforceable agreement between you, the seller, and the real estate agent helping you sell your home.
It stipulates that the seller will hire an agent to handle the home’s sale and grant permission to find a buyer. The seller decides to pay the vendor a charge in return.
Only the seller is required to have a sales contract. However, before a broker can represent a potential buyer, it may be necessary to sign an intermediary agreement on behalf of the buyer.
Therefore, if you are looking to sell a house in the capital smart city, it is compulsory to have a listing contract.
What to expect from the listing agreement?
A listing agreement is like a blueprint that sets out the obligations and expectations between a buyer and a seller. They are used in the real estate industry to ensure guaranteed sales and eliminate odds.
A listing agreement typically contains important details about an upcoming sale. Below we have mentioned the essential parts of the Listing Agreement.
1- Contact information
This may include the seller’s name, contact information (such as phone number and address), and realtor or agent details. Depending on the contract design, different contact information can be provided.
2- List price
Your house is for sale at this price. Make sure your listing price matches what you and your agent have had in the past.
3- Brokerage fee
A real estate agent’s commission is usually calculated as a percentage of the final sale price of the home. The average gross commission is 6%, split evenly between the agents representing buyers and sellers. In principle, providers cover both.
4- Agent obligations
These are the things we want the agent to do, and we give the agent permission to do. For example, in this part, you formally give your agent permission to host an open house or list your home on an MLS (Multiple Listing Service).
Knowing your agents’ responsibilities gives you a clearer idea of what they do and don’t do during the sales process.
5- Object description
Products for sale:
All personal items left after the sale of the property are placed here. Large appliances such as refrigerators, stoves, dryers, and washing machines are often included.
Anything you take or remove before the buyer owns the home is not included in the transaction.
6- Contract period
How long will the agent represent you before the contract expires? The default period usually included in the listing contract is subject to change.
Some institutions prefer a more extended period (6 months), but a shorter period (3 months) may be preferable. Agents may be happy to coordinate these details if you ask them.
7- Dispute Resolution Details
This legally dense part of the contract regulates how disagreements between realtors and owners are regulated. It may indicate whether the dispute will be resolved (with a third party making the decisions) through arbitration or mediation (if assisting the parties to reach a compromise).
It is quite possible that there is no need to engage in formal disputes. However, it’s always useful to understand this part in case you need it in the future.
8- Duration of protection
The protection period, also known as the tail period, helps maintain the seller’s commission. It will remain valid for a certain period of time after the expiry of the listing agreement.
A protection period begins when an agent shows a home to a potential buyer while the selling agreement is still active, but the buyer is waiting to purchase until the selling agreement is complete. Even if the contract contained a grace period clause, the seller would pay the broker in full.
9- Contract type
Listing deals usually come in one of his four types. In many cases, the top of the actual document will state the type of contract you are entering into.
Exclusive Distribution Agreement:
This is the most typical form of listing contract. Sell-only listings give the listing agent and its company the sole authority to represent the seller’s residence.
Exclusive distribution rights:
This is comparable to an exclusive agency listing agreement. The only difference is that with exclusive agency listings, sellers can sell the home themselves to avoid paying a commission.
Open Listing Agreement:
As you imagine open listings, imagine a “Last Agent Standing” competition. Thanks to this non-exclusive agreement, the seller can work with different realtors to sell the house.
Netlisting Agreement:
In a net listing agreement, the seller and his agent determine the fair selling price of the home.
Only the seller is required to have a sales contract. However, before a broker can represent a potential buyer, it may be necessary to sign an intermediary agreement on behalf of the buyer.
Pay attention to the listing agreement and choose the one that best suits your needs.
