What To Know Before You Sign a Listing Agreement for Selling a House
A listing agreement is a legally binding contract that allows a real estate agent to sell your house or property on your behalf. Signing this agreement gives your agent the green light to advertise your house to their networks in return for compensation from the sale proceeds.
Like any other legally binding contract, you should ensure that the listing agreement entails your obligations and those of your agent, as you have discussed and agreed upon. It helps to formalize your agreement to protect yourself from unforeseen tussles during the term of the business contract.
Let's take a look at this critical contract document and some of its important terms, which you should ensure your agent has outlined as agreed before you sign.
The Agreed Commission Fee for Your Agent
Before signing a listing agreement, ensure the document clearly outlines your asking price for the house and the brokerage fees or commission payable to your agent. Also, ensure the contract indicates when this fee is payable. Many agents take their commission after the actual sale, while others may require a percentage of their commission before the sale.
The Selling Rights of the Listing Agreement You’re Signing
Depending on the agreement with your agent, you may give them exclusive rights to sell your house or enlist the service of other agents. Most agents prefer the exclusive right-to-sell listing so they maximize their commission. Ensure you understand what selling rights you transfer to your agent before signing.
Proof of Ownership of the House
Your agent may require proof of ownership of the house you want to sell to avoid legal problems. The listing agreement may indicate your ownership and authorization for the sale to proceed.
The Duties of the Agent in Executing the Sale on Your Behalf
Ensure that the listing agreement outlines all the duties and representation you've delegated to your agent. These duties could include listing the sale in advertising channels, erecting a sale sign on the property and any other sale activities you entrust to your agent.
The Duration of the Contract
Confirm that the listing agreement contains a process-defined start and expiration date. A time-defined contract allows you to review your agent’s services and make changes accordingly at expiry. Ensure the contract duration you sign up for allows all sale processes to continue without time constraints on your part or your agent’s.
How To Resolve Any Arising Disputes
Before signing a listing agreement, ensure it contains a clause indicating how you can resolve any dispute that may arise between you and your agent during the contract.
A listing agreement should always protect the business interests of both the seller and the buyer in a transaction. Consider asking for an amendment where you feel the listing agreement your agent presents to you is lacking before you put your pen to paper.
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