| SELECTING A REAL ESTATE AGENT TO SELL YOUR HOME
Q. Why should I list my home with a real estate agent?
A. Experienced, reputable agents can be an invaluable asset to
a seller. Real estate agents can offer advice on the suggested listing
price, can give you an educated guess as to how long it may take to sell,
and can offer valuable suggestions about how to best show your home. The
major advantage, however, is that by listing with an agent, information
about your home is immediately available to hundreds of other agents and
buyers in your area through a Multiple Listing Service (MLS). MLS's often
have sophisticated Internet websites that also enhance their value to
you as a seller.
The agent with whom you sign a listing agreement is known as the listing
agent. Most are
members of the local MLS. Usually, within twenty-four hours of signing
an agreement with an
MLS agent, all MLS offices in your area will get a notice that your home
is for sale. Because most homebuyers work with agents, this makes information
about your home available immediately to a wide range of potential buyers.
Q. How do I choose an agent to sell my home?
A. Choosing an agent requires that you do your homework both
on the qualifications of the real
estate firm and the individual agent who will handle your sale. You may
want to interview several agents from various local firms with the following
in mind:
Is the firm a member of the National Association of Realtors, a national
voluntary
professional organization whose members exchange information and hold
seminars in order to
enhance their skills and improve the services provided to buyers and sellers
of real estate?
Ask about sales for the last six months or one year. How do these figures
compare to the
sales figures of other real estate agencies?
How long do homes stay on the market?
How much and where does the agency advertise?
How close is the actual sale price to the listing price for homes sold
over the past six
months or year?
You also may want to know how familiar various firms and agents are with
your area.
How well do they know its schools, facilities, and public transportation?
The answers to these and similar questions can help you select someone
who is knowledgeable and interested in working for you.
Ask to see the Multiple Listing Book and compare the listings of various
firms and
agents. A large firm may also have a large number of listings. In this
case, you will want assurance that the firm's agents have the time and
energy to devote to an additional listing. On the other hand, a small
office with fewer listings may be preferable, particularly if that means
better, more personal service, and, therefore, a quicker sale at or near
the desired price. This is another area where the power of the Internet
may help smaller offices compete effectively with larger ones.
Once you've settled on an agency, interview potential agents. Ask them
about their plans
to market the home. Who do they think are the best potential buyers and
how do they intend to
target them? For example, retirees and young families are usually interested
in different amenities.
If your home is a natural fit with a particular age group, ask each prospective
agent how he or she intends to show your home's advantages to its target
market.
It's a good idea to avoid agents who want to list your home at a much
higher price than
other agents suggest. This may be just a device to get the listing. Within
a few weeks, you may
find yourself being pressured to reduce the price drastically.
Obviously, if the agency or MLS you are considering has a website, you
should take a
look at it and see if it is consistent with the image you want your sales
representative to convey –
including checking for the existence of "broken links" or other
indications of poor quality.
Finally, make sure you are comfortable with the agent you choose. You
should have
confidence in your agent's ability. Your agent should be responsive to
you by telling you who has expressed interest in the home and following
up on the visits of potential buyers. For example, if many buyers have
seen your home but no offers have been made, your agent should be trying
to discover why. Is the price is too high? Is the decor too detracting?
Should some minor repairs be made?
Q. What is the listing agreement?
A. Once signed, the listing agreement is a binding contract between
the seller and the listing real
estate firm. Its provisions include length of the listing period, commission
rate and payment date, responsibilities of the firm and its agents, and
who is responsible for the cost of advertising and the other costs associated
with the home sale.
Read the listing agreement carefully. Do not hesitate to discuss any provisions
you would
like to change. To further protect your interests, resist signing an agreement
until your attorney has reviewed and approved it, especially if you have
requested changes, which have been resisted.
One final suggestion could save you lot of money. Before signing a listing
agreement, let
your friends and neighbors know you're selling. If any of them express
an interest in buying,
exclude them from the listing agreement. Then, if one of them ultimately
buys the property, you
will not be required to pay any commission at all.
Different Types of Listing Agreements
Most real estate firms prefer "exclusive right to sell"
listings. These listings guarantee that a
commission will be paid no matter who sells the property as long as
it is sold during the time
period covered by the listing. |
Other types of listings include open listings and exclusive agency listings.
Exclusive
listings require that the listing agency work the property and actively
promote its sale. In some
states, an exclusive agency listing may be offered under which the seller
can avoid paying
commission if he or she sells the house personally and not through an
agent.
Most real estate agencies avoid open listings for residential sales because
these listings allow
sellers to list with other agencies or to sell the homes themselves. Under
an open listing, the
commission is paid only to the agency that finds the buyer.
Real estate firms that are members of a Multiple Listing Service combine
their exclusive
right to sell listings. This makes the home available to a wide variety
of prospective buyers. The
multiple listing agreement defines how the firms share the sales commission
when the property is
sold.
Q. What fee will I pay on the sale of my home?
A. Typically, real estate firms charge 5 to 7 percent of the
sale price. On some higher-priced
homes, a firm may charge the full commission on the first $100,000 or
$200,000 and a lower
percentage of any amount above that price. If the agency that lists the
home is also the agency that sells it, the commission is shared by the
agency and the individual agent who actually handled the sale. If the
listing firm and the selling firm are different, the commission is shared
by the two firms.
Some Internet-based firms have marketed themselves as low-commission realtors,
advertising commissions as low as 2 percent. These services are so new
that it is difficult to say
how effective they be on behalf of buyers, but there is no reason not
to investigate them.
Other less common forms of fee payments include the flat-fee method, in
which a set fee
is charged regardless of the home's price, and the net method. The latter,
which is not favored and is illegal in some states, allows the broker
to retain any amount of the selling price higher than an agreed sale price.
It is important to keep in mind that all commission agreements are negotiable,
particularly
in a seller's market.
Q. What other terms in the listing agreement are negotiable?
A. In theory, they all are. At the very least, the real estate
agency should be willing to negotiate
provisions on:
• The length of the contract. Many of the standard forms provide
that the contract renews
automatically. Many firms want a six-month listing. If you're in a hurry
to sell your home, try
to get a 60-day or 90-day listing.
• When the commission is earned. For example, this might occur only
when the seller and buyer
actually complete the sale, not when they sign the purchase agreement.
• Who will be responsible for the advertising expenses--the seller
or the agency.
Q. What legal protection do I have after signing a listing agreement?
A. The listing agreement between a seller and a real estate firm
carries a fiduciary responsibility.
The firm and all of its agents act for the seller. They owe the seller
the duties of care, obedience, accounting, loyalty, and notice.
Q. Is the real estate agent liable if a potential buyer steals
something from my home?
A. Unless the agent showing your home was negligent, such as
giving your house keys to a buyer, it's unlikely that he or she is responsible
for thefts. Sellers should take the precaution of securing small, valuable
items. If your agent wants to use a lock box, which allows agents access
to keys to your home, make sure the agent uses an electronic lock box.
Unlike a manual lock box, an electronic lock box gives a printed record
of all the agents who have shown the home. This deters any agent who might
be unscrupulous.
Q. What can I do if my real estate firm doesn't seem to be working
very hard to sell my home?
A. The housing market and the salability of your home are usually
the chief problems when a
home isn't selling. But, sometimes a firm or a particular agent is at
fault for one reason or another.
The best way to prevent this problem is to limit the term of the listing
agreement to 90 days or less.
If your home doesn't sell in that period of time, you're legally in a
position to try another firm
You also may want to change firms if its agents don't return your telephone
calls, don't
keep you informed about the progress of your home sale, fail to schedule
open houses, or,
generally, appear uninterested in the sale. On the other hand, do not
be unduly upset if you are
presented with offers that seem unreasonably low. Your firm and its agents
have an obligation to present you with all offers, even those that may
seem insulting. Of course, you are not required to accept any offer presented.
But, if you feel that undue pressure is being applied, it may be time
for a change another reason to limit the length of a listing agreement.
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