Listing A House With An Agent
The listing agreement is made between you and a real estate broker, represented by the agent. Since this a binding legal contract, you should fully understand the implications of what you are signing.
Discuss what services will be provided and the terms, especially the list price, commission, and contract length.
Exclusive Right To Sell
This agreement type is the most popular, used by home sellers seeking the agent's commitment and a full range of services. Only one agent has the sole right to sell and earn a commission. If another agent brings a buyer the fee is shared between the two agents.
Agents prefer exclusive contracts as well, because they give them a better opportunity to earn their commissions.
Don't list the property for longer than 90 days, or worse unspecified time. Choose between 30 to 60 days, depending how quickly homes sell in your area. If you're satisfied with the agent you can later extend the agreement.
Your listing agreement has to describe the relationship between you and the agent. Usually, listing agents represent only sellers.
That means the agent will be solely working for you, and has to act in your best interest. If the agent also represents the buyer, you'll be asked to accept his or her role as a dual agent.
Homesellers who are leaning toward a privte sale may resort to other types of listing agreements. These are open-ended contracts, which allow them to sell either on their own or with an agent, whichever comes first.
Holdover Clause - The owner always has to pay the commission when a house sells during the contract term, no matter who finds a buyer. If you sell the home yourself your listing agent is still entitled to his or her fee.
This obligation to reward the agent is extended by a holdover clause, usually lasting from 60 to 90 days after the contract expires.
That's because a buyer may come up later, and listing agents want to make sure they'll be paid for their work. Have the clause removed or negotiate the holdover time to be as short as possible.
Termination Clause - Reserve your right to cancel the agreement. An exit clause is desirable when you become dissatisfied with the agent, or change your mind about selling due to some new circumstances.
Agents may request to be compensated for their work and expenses. If you'll have to reimburse the agent, negotiate the maximum amount.
How Will You Market My Home
The way your home will be advertised has a huge impact on how quickly you can sell the house and at what price, so you should discuss with the agent all details.
You want to see signs of a well crafted and dynamic strategy which can be launched in no time as your house hits the market.
An experienced agent can tell without hesitation the exact steps of own plan, and explain how to achieve as much market publicity as possible.
As listing the property on the MLS and placing a "For Sale" sign on a lawn isn't enough a good agent will also offer you other marketing services like:
These marketing techniques help to induce competition between buyers. Once your property is introduced to a great many of them you're more likely to receive multiple, contending offers and a better selling price.
You may find it surprising but not many homes get sold with open houses. Such events usually attract few visitors, driven more by unfocused curiosity than a genuine interest.
There's a prevaling belief that open houses work, and many owners want them to be a part of the selling process. Agents comply with that expectation, but most of the time they use an open house as a chance to find prospects they could possibly work for on another house.
By contrast, an agent's (broker's) open house run specifically for other real estate professionals will work better. Agents are very results oriented, and if they tour your home, you'll get a better exposure to qualified buyers.
What Commission Should I Pay
Fees vary by a region, and may be calculated differently. In Ontario an average commission rate is 5% of the purchase price, whereas in BC you may pay 6% on first $100,000 and 3% on the rest.
Feel free to bargain. Even if you don't get anything, it's a good opportunity to test the agent's negotiation skills. An agent who gives up easily lacks a professional confidence and is a feeble negotiator.
Good agents are prepared for such requests. They have rational arguments handy to convince their clients they are worth the money they ask for.
You are in a better position to negotiate if you sell and buy with the same agent. Since you bring two deals you can negoyiate a break on the selling.
Agents are also more receptive to cuts when they sell an expensive house. Homes in the high end of the market produce lucrative commissions, and a lower fee is still regarded by many agents as a better than average income opportunity.
How To Change Agents
When you are unhappy with your agent, ask the agent's broker for help to resolve problems. If they still persist the broker can designate another agent from the same office to work with you.
If you decide to hire a new agent working for a different broker, you have to wait until your holdover clause expires.