If you plan on using the services of a real estate agent to sell your house, you can enter into an agency agreement. Before selecting one of the three common listing arrangements, learn all you can about the respective types and consider a few queries. Just how much work do you want to do to help sell the house? Do present market conditions need the full services of an agent to expedite the sale? Are you going to save money by potentially bringing a purchaser to closing yourself?
Exclusive Right to Sell
This agency gives the maximum authority to your realtor. She will make a commission no matter who buys the house or where the purchaser originates. The seller pays the listing commission and the selling broker’s fee. Within the list period, the selling agent may be the listing agent or a working salesperson or broker. In case you find a buyer yourself, you will still pay the agreed-upon commission.
The list agent has the right to represent the seller and promote the house, but the homeowner could also find his very own purchaser. The seller only pays a selling commission when the agent finds a buyer and attracts him to closing. Commissions could be split between the listing agent and a working salesperson or broker. However, since the agent may not make a commission, he has less incentive to market the property.
Sellers maintain the maximum control with an open list. Because the bureau is non-exclusive, sellers could have open listings with any number of brokers. The homeowner avoids the listing fee associated with exclusive-right-to-sell listings, but pays a commission to an agent that brings a qualified buyer to closing. If the seller finds his own purchaser, no commission is due the agent.
Listing agreements are usually between 30 days and six months in length. Commissions vary and are negotiable, usually ranging from between 2 percent and 6% of the selling cost of the house. Agreements frequently incorporate a clause stipulating that a listing agent will be given a commission around six months after the listing expires if any purchaser, introduced by the listing agent, buys the property.
Should you have to sell fast at a weak real estate market if houses are moving gradually, consider paying a higher commission to your agent. An agent, in the same way as any other businessperson, will work harder for a bigger paycheck. Likewise, a working real estate agent will probably devote more time hoping to bring a professional purchaser to the table when she can make a large fee.