When engaging a real estate agent to sell your property, once you agree to work with them, they will have you sign a listing agreement. The listing agreement will define the relationship between you and your real estate agent and the real estate agent’s broker.
The following are important provisions you should pay special attention to in a listing agreement:
Term – How long will the real estate agent have to list the property? Make sure the length of the term is clear and pay special attention to how the term might be extended. If you enter a contract to sell your property just before the listing agreement term ends, then there might be a provision in the listing agreement that automatically extends the term.
Price – What price are you willing to sell the property at? Make sure that the listing agreement identifies your sale price/sale range.
Marketing – Will the listing agent market the property using newspapers, internet, social media, other media, signs on the property, etc.? The listing agreement should indicate how the listing agent intends to market the property.
Seller obligations – What will your obligations be? The listing agreement will likely require you to cooperate to carry out the agreement, disclose issues with the property, allow the listing agent the exclusive right to market the property etc. Make sure to review your obligations as the seller to ensure you can comply with your obligations.
Commission – How much will the commission be? The listing agreement should indicate exactly how much the commission for the real estate agents will be. The standard commission in Florida is 6% (3% to buyer’s real estate agent and 3% to seller’s). When is the commission earned? The property might not be required to be sold for the commission to be earned. The listing agreement might state the listing agent earns his or her commission when a buyer is procured. If that is the case, you might be on the hook for commission if your agent finds a buyer for you, you enter a contract, and you don’t close the transaction.
Termination – How can you terminate the listing agreement? Some listing agreements may offer you the ability to terminate the agreement for a fee while others may only allow termination with the written consent of the real estate agent/broker.
Dispute – What happens if there is a dispute over the listing agreement? The listing agreement may require mediation or arbitration prior to filing a lawsuit. In addition, the listing agreement may limit your ability to recover for certain damages.
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