One of the first steps when selling a home, is signing a listing agreement with a real estate agent. This contract outlines the agent’s responsibilities, the seller’s obligations, and the terms of the relationship. So it’s fair to say understanding this will help you make informed decisions and ensure a smooth transaction.
What Is a Listing Agreement?
A listing agreement is a legal contract between a home seller and a real estate agent. It grants the agent the right to market and sell the property on the seller’s behalf. The agreement details key terms, including the listing price, commission structure, and the length of the contract.
What Does Include?
Each listing agreement varies, but most cover the following:
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Listing Price – The price at which the home will be marketed, often determined with the agent’s guidance.
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Commission – The percentage of the sale price paid to the listing agent and buyer’s agent upon closing.
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Length of Agreement – The duration the agent has to sell the home, typically ranging from a few months to a year.
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Marketing Plan – Strategies the agent will use to promote the home, such as online listings, open houses, and print materials.
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Seller’s Obligations – Requirements such as keeping the home in showing condition and providing necessary disclosures.
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Agent’s Responsibilities – The agent’s duties, including marketing efforts, scheduling showings, and negotiating offers.
Seller’s Options for Representation
Sellers have different types of listing agreements to choose from, depending on their needs and level of involvement:
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Exclusive Right-to-Sell Listing – The most common type, giving the agent full control over the sale. The agent earns a commission regardless of who finds the buyer.
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Exclusive Agency Listing – Similar to the exclusive right-to-sell agreement, but the seller retains the right to sell the home independently without paying a commission.
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Open Listing – A non-exclusive agreement allowing multiple agents to market the property. The seller only pays commission to the agent who secures the buyer.
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Net Listing – Less common and regulated in many areas, this agreement allows the seller to set a minimum price, and the agent keeps anything above that amount as commission.
Choosing the Right Agreement
Selecting the best listing agreement will depend on your goals and level of comfort with agent representation. Most sellers benefit from an exclusive right-to-sell listing due to the agent’s full commitment and marketing efforts. However, those wanting more flexibility may consider an exclusive agency or open listing.
Working with an experienced luxury real estate agent can ensure a professional and effective selling process, but before signing any agreement, make sure to review the terms carefully, ask questions, and ensure you understand all obligations.
Kelli Eggen
Luxury Real Estate Agent
