You want to sell your home and, like many others, downsize a little. You need to select a Realtor® to list your home for sale. You get recommendations from your friends and call Helen Brown an agent of Breezy Palms Realty. Helen comes to your home, talks about the current market, perhaps recommends a price and then delivers a listing agreement for
Most likely the agreement Helen delivered is a 2017 industry form published by the Florida Realtors®. Typically, these are Exclusive Right of Sale agreements. Under such an agreement, the broker earns a commission regardless of whether the buyer is procured by the broker, a cooperating broker or you during the listing term. You have an obligation to refer any prospects who inquire about your property to your broker.
The listing agreement contains a lot of fine print and lacks simplified “plain language”. It might be wise to contact your real estate lawyer prior to signing. If, however, you’re pressed for time, here are some questions you might have along with some answers:
- How long should the listing term be? Most brokers will seek a one year listing. You might consider a shorter time period like six months if the time period includes the selling season.
- May I cancel the listing agreement? The short answer is no. This is a binding contract for the listing term. However, there is an unusual provision which allows cancellation if the broker consents. Of course, any contract can be cancelled if both parties agree. That same provision allows the broker to later revoke the consent. Tell Helen that you want to be able to cancel the listing at any time, without conditions, and insert a special provision permitting this. Most brokers will accept this change although they may want a cancellation fee to cover their expenses. They don’t want to hold a dissatisfied seller to the contract and risk their social
- I recently discussed selling my home with a neighbor who expressed an interest in buying. Will the broker be entitled to a commission if I sell to my neighbor? Short answer—yes. However, ask Helen to add an exclusion provision to the listing agreement stating that no commission will be payable if the property is sold to the neighbor.
- If I enter into a contract and the buyer defaults do I receive the deposit? Short answer—yes and no. The listing agreement contains a provision stating that the broker will share in any forfeited deposit. The percentage amount is inserted in the blank but the default amount is 50%. Ask Helen to insert 0% or some other acceptable percentage. Most brokers will accept such a change on the assumption that they will be continuing the listing.
- The roof on our home has some minor leaks which have not been repaired. Should I disclose this to the broker? Very definitely. As
a seller of residential property you have an obligation to disclose any defects in the condition of the property which are not readily visible and which have a negative effect on market value. Some brokers will ask you to complete a disclosure/questionnaire form. Your buyer will be hiring a professional inspector to find and report on defects and deficiencies. Consider obtaining a professional inspection of your home prior to listing and correct those deficiencies prior to contracting.
- What should I do when a contract offer is received? Talk to your real estate attorney before signing. If you can’t reach him/her ask the broker to attach the Attorney Approval Rider to the contract. This will allow you to accept and sign the agreement subject to later review by your attorney.