Listing contract clauses you should request and be wary of


There are clauses you should try to negotiate with your agent, and some clauses you should watch for in listing contracts.

Exclusion clauses

If you already have identified a buyer who has expressed interest in purchasing your home, do not wait to put the home on the market until that buyer makes a decision.

You could lose valuable marketing time. Instead, ask the agent for an exclusion for ten days to attempt to close the buyer. If the buyer purchases the home after that ten-day period, ask the agent if he or she would be willing to handle the transaction for half the normal fee.

Early termination clauses

Ask your agent to include a clause that allows you a release from the listing contract if you are unhappy with the agent's service. This will keep the agent on his or her toes and insure against an agent who does not fulfill his or her promises.

The release clause or early termination clause should spell out that you may list the property with another Realtor immediately after the release.

Cancellation fee

Some real estate firms charge a fee if the seller cancels the listing. It may be called a liquidated damages fee, cancellation fee, or an exit fee. You should not have to pay a fee if the Realtor does not provide the services promised.

If you simply change your mind about selling, you will have to decide whether or not you feel you owe the Realtor a fee for the effort he or she put into selling your home.

Document preparation or transaction fees

Part of a Realtor's job is to handle all the paperwork associated with the transaction. Some Realtors pass off part of their work to assistants and pass the cost along to you in the form of transaction fees, conveyance fees, document preparation fees, or similar charges.

Although there are some areas of the country where this practice is common, you should not be paying any fees above the commission unless you agree to do so in writing when you list the property.

Holding the home

Some Realtors try to convince home sellers that it is in their best interest to hold the property off the MLS or the open market for a few days or a few weeks. The Realtor will offer the rationalization that he or she will have more control over the transaction and this will benefit the sellers, or that the Realtor will give the seller a discount on the commission by a percent if the agent sells it him- or herself in the first couple weeks while the home is not in the MLS.

Do not do this. Pocket listings do not benefit the owner. They benefit the agent, who is using your home to try to attract buyers. They may have a tiny chance of double popping, which is handling both the buyer and seller, and therefore keeping the entire commission.

The reality is that you want everyone to know your home is for sale in those first few weeks. Rather than having only one agent working to find a buyer, with your home listed on MLS, you are opening your home up to all the Realtors in the area and all the buyers those Realtors are working with. When marketed by one single agent, you are not a whole lot better off than trying to sell on your own.

Your goal is to create demand for your home, and hopefully generate a lot of showings and multiple offers that bid the price up. Hiding the home from the open market for a few weeks does nothing for you.

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This article was sent to us by: Fred Gaultin at 04032011

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