The Different Types of Listing Contracts Between Real Estate Agents and Home Sellers
When you hire a listing agent (your real estate agent that will be selling your property), you’ll be presented with a listing agreement that outlines the duties and responsibilities your real estate broker will have in selling your property for you.
While it may seem like just another form to sign, it’s actually a pretty important document that can have a significant impact on the sale of your home.
In this article, I’ll take a look at what a listing agreement is, what types of listing agreements there are, and why you should care about this seemingly innocuous contract.
What is a listing agreement (or Listing Contract)?
A listing agreement is a contract between a seller and a real estate broker that gives the broker the right to list the seller’s property for sale. The agreement spells out the terms of the relationship, including the length of the agreement, the amount of the commission, and what happens if either party wants to terminate the agreement early.
Types of listing agreements
There are two main types of listing agreements: exclusive and non-exclusive.
Exclusive listing agreement
An exclusive listing agreement gives the brokerage firm the sole right to sell your home during the term of the contract. This means that no other firm or agent can sell your home during that time period. Exclusive listings are usually more advantageous for sellers because they provide more motivation for the brokerage firm to sell your home quickly.
Non- Exclusive listing agreement
A non-exclusive listing agreement, on the other hand, allows you to list your property with multiple firms or agents simultaneously. While this may seem like a good way to increase your chances of selling your home, it can actually backfire. Having too many cooks in the kitchen can make it more difficult to coordinate showings and could end up costing you more in commissions if more than one firm or agent sells your home.
Limited service contracts
Limited service contracts are becoming more popular as sellers look for ways to save on commissions. With a limited service contract, the agent agrees to provide only certain services, such as listing your home on the MLS and holding open houses. It’s important to note that if you go this route, you’ll likely have to do most of the legwork yourself when it comes to finding buyers since the agent won’t be doing much more than putting your home on the market.
Why you should care
While it may seem like just another contract to sign, understanding and negotiating your listing agreement is crucial to ensure that you’re getting the best possible service from your real estate agent. Be sure to take some time to read and understand the document before signing on the dotted line!
The bottom line is that understanding your listing agreement is crucial to getting the best possible service from your real estate agent.
So, which listing agreement is right for you? It really depends on what’s most important to you as the home seller.
If having just one real estate broker working on selling your home is most important to you, then an exclusive listings agreement makes sense;
however, if having more flexibility in how you want to sell your home is most important to you, for example being able to also try and sell it on your own while still working with a real estate broker, then a limited listings agreement may make more sense;
finally, if saving money on commissions is most important to you and willing to take on more risk (since there’s no guarantee any real estate agents will actively try and market or sell your home), then an limited listings agreement may make sense for you.
Be sure discuss all options with potential real estate brokers and/or consult with a private attorney before making a decision so that way you can choose the option that makes the most sense for YOUR situation!
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Check out my other articles for more helpful information about the home selling process.
The home-selling process can be daunting, especially for first timers. But don’t worry, I’m here to help. To give you an idea of what to expect, I’ve put together a simple guide with the top things home sellers need to know.
Get more information by checking out my other articles linked below.
– House Selling Process – What You Need To Know
– 6 Factors That Increase Home Value in the Dallas Area
– Determining The Value of Your Home
– Get Your Home Ready To Sell Checklist: A First Impression That Lasts!
– Understanding the Listing Contract
– Staging Your Home To Sell – Will it Help?
– What does a Realtor® do to sell your house?
– How to Have a Successful Showing or Open House (Showings & Open House Checklist)
– Comprehensive Home-Selling Plan To Sell Your House
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– Texas Home Sellers Tips, Tricks and Lifehacks
– New Construction Homes in Dallas TX
– Mortgages for Homebuyers and Investors in Dallas-Fort Worth
The Seller’s Agent Duty
READ: Texas Real Estate Commission Information About Brokerage Services
AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner’s agent through an agreement with the
owner, usually in a written listing to sell or property management agreement. An owner’s agent must perform the broker’s minimum
duties above and must inform the owner of any material information about the property or transaction known by the agent, including
information disclosed to the agent or subagent by the buyer or buyer’s agent.
A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents):
– Put the interests of the client above all others, including the broker’s own interests;
– Inform the client of any material information about the property or transaction received by the broker;
– Answer the client’s questions and present any offer to or counter–offer from the client; and
– Treat all parties to a real estate transaction honestly and fairly.
TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH:
– The broker’s duties and responsibilities to you, and your obligations under the representation agreement.
– Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.
TYPES OF REAL ESTATE LICENSE HOLDERS:
– A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker.
– A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.
