Negotiate Your Listing Agreement
The listing agreement is a standard document in the real estate industry. It establishes and defines the relationship between the broker and the seller, and is arguably one of the most important documents for the seller to understand. It’s also one of the easiest pieces of paper to ignore.
Sellers who have their eyes fixed on other parts of the real estate transaction may overlook some of the terms and conditions outlined in this agreement. Others believe the listing agreement is not open to discussion. In doing so, they miss out on an opportunity to negotiate these terms to get a better deal for themselves.
Six percent is the traditional commission rate for a real estate transaction, but brokers sometimes lower this rate under certain conditions. For example, brokers selling luxury properties and those in markets where the inventory turns quickly may be more likely to accept a lower commission. Some brokers also adjust rates for returning clients.
Cooperating Broker Commission
When brokers work with cooperating brokers, they usually split the commission evenly between the two firms. Sometimes brokers agree to a lower commission but still keep at least three percent for themselves. This is a great deal for the listing broker, but it may discourage others from showing the property and reduce the pool of potential buyers.
Under most listing agreements, the broker has the exclusive right to sell during the listing period. This means that as long as the property sells before the contract expires, the broker receives the agreed-upon commission regardless of how the buyer found the property. If you’d rather not pay the full commission if you find your buyer, ask the broker to modify the clause.
Access to Property
The broker may ask you for permission to install a lockbox or key safe on your property. This gives authorized people, including the broker’s agent, cooperating brokers and inspectors access to the property. If you’d rather be present when someone has to enter your property, tell the broker and make sure your wishes are in the listing agreement.
The listing agreement is valid from the moment you sign it until the expiration date written in the agreement. This typically ranges from three to six months, depending on the type of property and local market conditions. Not only can you negotiate this time frame, but you can ask for a termination clause that lets you end the agreement early.
Selling real estate produces an extensive paper trail. It helps to have someone on your side to review all the documents and make sure you get exactly what you want in the transaction. Call today and put our real estate experience to work for you. Hudack Law 714-351-3236 serving all of Southern California.