Step – 3 » Sign a Listing Agreement
The “Listing Agreement” authorizes your REALTOR® and their brokerage to market and sell your home. This agreement serves three purposes.
- It defines your relationship. Every detail of your work together, including the limits of your REALTOR’S® authority will be clearly defined.
- It provides detailed information about the home. This information can then be placed on the Multiple Listing Service, to help potential buyers find you.
- It forms the basis for drafting offers on your home. Any formal offer on your home starts with the Listing Agreement.
Highlights of the Listing Agreement Authority.
This describes the legal relationship between you and the real estate brokerage, and it sets a time limit for the REALTOR® to sell your home.
Exclusive or Multiple Listing Service®?
“Exclusive Listing” means that only your brokerage can find a buyer for your home. REALTORS® generally recommend a “Multiple Listing”, which allows them to put your home on the Multiple Listing Service®. It’s a popular real estate marketing system paid for and operated by REALTORS®, so it can be used to spread the word to other REALTORS® to help find you a buyer. A “Multiple Listing” gives your home maximum exposure and your commission stays the same. It really is the better way to sell.
The real key to attracting buyers. You have the final say over this magic number, but your REALTOR® will have very useful advice. You can learn more about choosing the right asking price in Step 7.
Real estate commission.
This is usually a percentage of the final sale price, and you only pay once your REALTOR® has found you an acceptable offer. This commission or percentage is negotiable, and is agreed upon between you and the individual brokerage.
A physical description of your property.
Your REALTOR® will itemize the lot size, the age of your home and the style of construction. They’ll list the style, number and size of the rooms. They will also be sure to include any outstanding selling features of your home such as “backs onto ravine” or “fabulous kitchen renovation.”
Legal information such as the lot number, land surveys and the zoning code will be included.
Financial information like the minimum deposit you require with any offers. If you have a mortgage that can be assumed (taken over by a buyer) that information should be listed because it could make your home more desirable, especially if you’re locked into a lower interest rate than what is presently available.
This lets everybody know how long you need to move out, once your home is sold. The standard time is 60 or 90 days, but if you can be flexible be sure to make note.
How the home will be shown?
Normally your REALTOR® will arrange appointments. Any specific instructions, such as “make sure the cat stays in” can also be noted.
What exactly is included in the price? Chattels and Fixtures.
Chattels are moveable items like washers and dryers, microwaves and window blinds. Chattels are not automatically included in the sale, but sellers will often include them to sweeten the deal. Any chattels you wish to include should be clearly noted.
Fixtures are permanent improvements to a property like central air conditioning, installed lighting and wall-to-wall carpeting. Fixtures are assumed to be included in the sale of the home unless you note otherwise. Maybe the dining room chandelier is family heirloom and you wish to take it with you. The line between chattel and fixture can get blurry, so leave nothing to chance!
Go over every item with your REALTOR® and make sure it’s accounted for in the Listing Agreement.
The importance of a Seller Property Information Statement.
Many real estate boards now request a Seller Property Information Statement. This can list any recent renovations or improvements, but more importantly, it lists all the known major defects and faults with the home, hidden or not.
Be honest about imperfections.
Maybe the basement leaks during the spring thaw, maybe the kitchen sink backs up when both showers are running. It is best to come clean and report it. If you don’t, and a significant fault is discovered before the sale, it can cast a shadow of doubt over the rest of the home. If the fault is discovered after the sale, and it can be proven that you knew about the problem, you may be sued for the cost of the repairs.
Honesty is always the best policy.
A major defect does not mean your home will not sell. List the defect and state how your home’s price has been lowered accordingly. This can actually be attractive to some buyers, especially if they have experience with the required repairs!