Listing Agreements are contracts between a seller and a real estate brokerage. They can come in different forms, but in Florida the most common document is the Exclusive Right of Sale Listing Agreement. This is an agreement between a seller and a licensed real estate brokerage, represented by a designated real estate agent. There are terms included in this agreement including the date range when the property will be listed on the market for sale (or rent), for how much the property will be listed, the amount of commissions paid, and some specifics as to how the property will be marketed. These terms are generally discussed when the seller (or landlord) and real estate agent sit down to discuss the logistics of marketing and showing the property. They will go through the listing agreement, sign and initial, and discuss the terms and come up with a strategic plan to ensure the property is fully prepared to look it's best, when it will be available to show, and details potential buyers/renters should know about the property.
The parties are listed at the top of the agreement, and include the property owner's full name as well as the real estate brokerage. The real estate agent is not named at this point, because though the owner is hiring the real estate agent, the agent is a representative of their broker.
When is the seller ready for the property to go on the market? For how long will the agreement with this brokerage and real estate agent be effective for? Most common listing agreement time frame when selling a property is six months, but this depends greatly on the area the property is located and how competitive the market is. It will also depend on the goals of the seller, if the listing price is realistic, if the property is occupied etc. These factors can cause a sale to take longer.
Sellers should make sure they understand that all fixed (attached or plugged in) appliances like refrigerator, AC, water heater, oven, dishwasher, ceiling fans, hurricane shutters are generally included in the sale of a house. But if there are items the seller wants wants to detach and/or take with them after the sale, they must be listed in the property listing and disclosed to potential buyers. These items most commonly include a 2nd refrigerator in the garage, an expensive chandelier in the entryway or dining room, maybe extra pool equipment or large patio grille, possibly a backyard shed or other storage unit. Items the seller wishes to EXCLUDE in a sale should be included in the listing agreement, so the real estate agent can properly market and disclose these items to potential buyers.
The seller and real estate agent will discuss the property's current market value. However, it is the seller that will determine the listing price. The agent DOES NOT and SHOULD NOT designate this amount, it is the SELLER's decision. With the listing price, the seller can also decide which type of financing they are willing to accept from a buyer. Is the seller okay accepting an FHA or VA financed buyer? There can be drawbacks to accepting these types of financed loans, and the seller and listing agent should discuss these different terms and what they can mean to a potential sales contract. Is the property's listing price too high and/or will have an issue with an appraisal? It may be important to designate to all potential buyers that the seller will only accept an all-cash deal in order not to be beholden to an appraisal.
The listing agreement is also the place where commissions are specified. Will the seller be paying the normal 6% commission? Will this total 6% be split equally and fairly between both the seller's brokerage and buyer's brokerage? Are there any additional fees? This is an area that is important to discuss between the seller and the real estate agent. Remember, the agent pays for marketing, virtual tours, MLS, brokerage fee costs out of the commission they make, and spend a lot of time marketing, showings and communicating with potential buyers, associations, other real estate agents, inspectors, appraisers, lenders, closing agents, etc. For more insight into the process, check out How Much Does It Cost to Sell a House? Here's a Reality Check from realtor.com.
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