Common Negotiables & Red Flags in The Listing Agreement

Negotiables In The Exclusive Right-Of-Sale Listing Agreement

• Contract Term: Look to the average days on the market in your neighborhood to guide you toward an appropriate timeframe. For example, if the average days on the market is 30 days, you wouldn’t want to sign a one-year listing agreement unless there were extenuating circumstances. Three to six months would be more appropriate. Remember that on average, it takes 30 to 45 days to close once you’ve accepted an offer. So you want to allow ample time to get your home sold in the event that a deal falls through due to financing, inspection, or appraisal issues.
• Listing Price: Your agent can change the price at a later date with your consent. The listing agreement might include a listing price range if you haven’t agreed on a price before the listing agreement is signed. A comparative market analysis will help you determine an appropriate list price.
• Financing Terms: You want to provide buyers with as many financing terms as possible to increase your chances of selling. However, some terms don’t work for all property types and conditions. If your agent excludes conventional, FHA or VA financing be sure you understand their reasoning. If you would like to consider seller financing, talk to your financial advisor so you have a full understanding of the risks involved.
• Commission: Commission is negotiable, but remember that your agent will have costs associated with your listing. Discount brokers tend to cut marketing costs and spend less time and effort getting your home sold. You can actually net a larger profit by paying a professional Realtor the standard commission rate in your area.
• Marketing: You can prohibit your agent from displaying your listing on the MLS, internet, or third-party syndicated websites. You can also withhold your property address from the internet. This will hinder your agent’s ability to get the home sold.