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Here's What You Need To Know About the
Listing Agreement
The Details of the Contract
Depending on the type of listing agreement, you can expect to see most of
these terms detailed in the document.
Terms of the Agreement
The length of time the contract will be in effect typically runs anywhere
from 60 to 120 days, depending on the local market. Since a contract can
be extended before it expires, you may not want to lock yourself into an
automatic extension.
Under Terms of the Agreement, you'll also find the price of the home. You
and your real estate professional should arrive at the home's market value
after considering the Comparative Market Analysis (prepared by the agent)
and other factors.
Commission
It may come as a surprise that commissions are not set by the industry.
Real estate professionals expect to earn between 6% and 7% of the sale
price, depending on what's customary in the area. If another agent finds a
buyer, the commission is split between agents. Although commissions are
negotiable, this practice tends to be reserved for special circumstances.
For instance, if a real estate professional knows of an interested buyer,
this would eliminate the need to market the home. To close the deal, he
may be willing to cut his commission.
Multiple Listing Service (MLS)
This section authorizes a real estate professional to list your home with
the MLS. An MLS listing gives your home greater visibility and even
exposes it to Internet users. Of course, you have the right to opt out of
listing with the MLS. But why should you, when it can dramatically
increase the chances of selling your home. The Chicago market has two
major MLS’s, and you should be sure your real estate professional is a
member of both.
Lockbox
This hollowed-out padlock or miniature safe holds a key to your home. The
lockbox, which usually gets attached to the front door, allows easy access
for anyone showing the home. Only a person with a secure electronic keypad
can gain entry.
Description of the Property and Its Condition
Here you'll find a description of the property and its general condition
as well as the condition of its major systems-mechanical, plumbing and
electrical. Along with the description should be a list of the items that
will stay with the home, for instance, the washer and dryer, and those you
intend to remove such as a light fixture.
Marketing Plan
Kiplinger's Buying and Selling a Home (Kiplinger Books, 2000) suggests
adding the marketing plan as an addendum to the listing agreement. The
marketing strategy should be structured to cast a wide net and might
include advertising, open houses, the multiple listing service, signage,
fact sheets, and so on.
Your real estate professional will complete the listing agreement based on
your input, so you may want to take time before you meet to consider your
response to each section of the contract. The more prepared you are, the
less likely you'll have a misunderstanding down the road.
Mike Cromie of Prudential Properties Northwest I,
Palatine, can be reached at 847-705-6500. Mike Yeats of Prudential
Properties Northwest, Arlington Heights, can be reached at 847-398-4600.
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