An oral or written
agreement under which the owner appoints a
real estate brokerage for a designated
period of time to sell, lease or exchange a
property, based on the owner's stated terms,
and under which the owner agrees to pay the
brokerage a commission.
Basics of a listing
agreement will include;
Term of the Agreement.
A longer
agreement benefits the agent because it
allows him or her more time to find a buyer
for your home. In a weak market, that's
okay, but if homes are selling quickly, you
don't want to be committed to one agent for
more than a few months. If the home doesn't
sell within the initial period and you're
satisfied with the agent's efforts, you can
offer to extend the term of the agreement
before it expires.
Commission.
Although commissions are negotiable, most
areas have a standard percentage that agents
expect to receive. This amount usually is 6
percent of the sales price, but you will
find agents who accept 5 percent and agents
who ask for 7 percent. Whether you want to
pay the percentage that's typical in your
area or negotiate a lower rate is up to you.
A lower commission will save you money. A
higher commission will give the agent more
incentive to invest in marketing your home.
Other agents can find out how much
commission is offered on your home through
the MLS. The agent's commission technically
shouldn't be renegotiated as part of the
purchase agreement between the seller and
the buyer, but some agents will give a
little to close a price gap between the
seller and buyer, consequently making the
transaction viable.
MLS. A listing agreement
typically authorizes your agent to post your
home in the Multiple Listing Service (MLS).
Unless you're selling a very exclusive
property or have serious personal privacy
concerns, the MLS is a no-brainer because it
helps the agent market your home to the
widest possible group of potential buyers.
Today, most MLS databases are accessible by
consumers on the Internet. The public does
not have access to commission information on
the listings.
Listing Price
The price at which
the property is offered for sale in the
market, frequently referred to as the asking
price.
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