A seller listing agreement can turn out to be a blessing or a curse when you try to sell your house. Learn what goes into an agreement, the things you should negotiate for, and how to get out of it if things aren’t going well.
The seller listing agreement is a contract between the real estate agent or broker, and the seller that governs the relationship between the two for the sale of real estate. All the terms regarding the agent’s role in the sales process, how much commission the agent will get paid and how long the listing lasts are included in the agreement and more. It is binding on both parties, and once signed, it’s difficult for you as the seller to cancel the agreement, unless the agent agrees to release you.
Basics of the Seller Listing Agreement
When you find a real estate agent to sell your home, that agent will often present an agreement to you. The agent’s broker will require it as protection for the agent and the real estate agency. To begin with, the broker wants to ensure that the agent gets paid for the work put into selling your house. The broker splits the commission earned with the agent. You’ll also find legalese in the agreement about liability, which is there to protect the agent, broker and agency in the event you sue them for damages resulting from the contractual relationship. Then there’s the length of the listing agreement, which the agent will want to be as long as possible. Once you sign the agreement, you cannot list the house yourself or allow someone else to list it during the same time period without being liable for damages to the agent. For that reason, you’ll want to negotiate the lowest possible listing term, such as 30 days.
When You’re Unhappy with the Relationship
Not every seller and agent is a perfect match. Some agents don’t produce the results that they verbally promised, or they prioritize higher priced homes over others. You may feel as if your property has been shoved in the background to give way to other homes on the market, or that your agent is not actively working to sell your home. If you’re at the point where you are unhappy with the relationship, then you have to find a way to end the seller listing agreement.
How to Cancel It
The truth is, you don’t have the ability to cancel the listing agreement in most instances. Unless you can prove fraud, duress or some illegal activity on the part of the agent, you are obligated to the agreement.
That doesn’t mean you have to be stuck with the agreement, though. It does mean that it’s completely up to the agent and broker to release you from the agreement, and it’s important to remember that as you approach them. You are not entitled to a cancellation, and you have to be careful about your attitude when speaking with them. Be professional and courteous, and explain that it’s just not a right fit, you’re unhappy with the relationship, and that you would prefer to part ways.
Many times when you are calm and reasonable, the agent and broker will agree to release you from the agreement. You do have to prepare for the worst case scenario though, where an agent disagrees and wants to bind you to the contract. In that case, your best option is to take the home off the market for the remaining days or months of the agreement until the listing agreement expires. That’s why it’s so important to negotiate as short a term as possible in the listing agreement.
The best way to avoid an unhappy relationship with your agent is to do your homework. Before signing a seller listing agreement, check with at least three references and learn about the reputation of the agent. Read and understand the agreement, and explore alternatives before making a decision to sign it.
Image Credit: Svilen Milev