A listing agreement is a contract and a legal document. As with all legal documents, you should read the listing contract very carefully and be sure it is filled in exactly with the terms you agreed on. Be sure you understand exactly what you are agreeing to and what the terms mean. Your home is most likely a major asset and a large portion of your personal wealth. Don’t take the signing of a listing agreement lightly just because it appears "standard". If you don’t understand the contract or have any questions about your listing contract, it would be wise to seek legal advice for clarification.
A Listing Agreement is a real estate listing contract which gives a licensed real estate professional authorization to act on your behalf in the sale of your Florida home. You and the broker have responsibilities and obligations. Make sure that both parties (you and the broker) have written them in detail in the contract.
This blog series will clarify the critical differences in the Listing Agreements commonly used in Florida starting with the two types of Exclusive Listing Agreements. I am a licensed real estate professional in Florida and I am not an attorney. This explanation falls within the expertise of my license and my recommendations as a professional.
TWO TYPES OF LISTING CONTRACTS:
1. Exclusive Right to Sell Listing
The most popular type of listing between sellers and brokers is the Exclusive Right to Sell Agreement. This is noted on MLS (Multiple Listing Service) documents as Ex Rt or Ex Rts. Under the Exclusive Right to Sell listing contract, the broker is the “only” one authorized to sell your home. The listing broker lists your home for sale on MLS where other real estate professionals can see the details, pictures and video of the home. If your listing broker finds a buyer, your broker earns a commission. If another agent finds a buyer, your broker earns a commission. If you find a buyer on your own, your broker still earns a commission. If your house sells, your broker earns a commission. This agreement gives your broker the most incentive to spend time, money and energy marketing your home, especially to the other Realtors in the area who can show your home to their buyer clients. By the way, unless it is specifically spelled out in the Agreement, there is no obligation for the listing broker to spend time and money marketing your home.
The exclusive right to sell agreement is more likely to bring forth a “full service marketing” effort from your broker, since it is the only listing type that assures a broker will get paid for his marketing expense and efforts when the home sells since it doesn't matter who sells the home. However, oftentimes the broker does not put forth that "full service marketing" and spends very little effort or money to advertise, market and promote your home. The broker's obligations can be clearly spelled out in the Agreement as to the extent of advertising, Broker Open Houses, Customer Open Houses, web exposure and other marketing which the broker is obligated to perform. Otherwise the broker is free to do as little or as much marketing as they wish, while you are still obligated to pay the broker the agreed upon commission written in the Agreement if your home sells, even if they did nothing at all except list the property for sale on MLS and open the door or leave a key for other real estate professionals who call to see your house.
2. Exclusive Agency Listing
This is what appears in the MLS (Multiple Listing Service) as Ex Brk and other abbreviations depending on the MLS. The Exclusive Agency Listing is similar to the Exclusive Right to Sell Listing, with the difference being that YOU reserve the right to sell your home YOURSELF and not pay the broker a commission. The broker only gets paid if your home is sold by a licensed real estate professional and that is any Florida licensed real estate professional. If you find the buyer and sell your home yourself, you pay no commission. But, if it's listed on MLS and real estate professionals see it and show it, resulting in a sale, the listing broker, even if they have done no marketing or advertising, will still get the commission stated in the Exclusive Agency Listing.
The Seller might be told factually that with the Exclusive Agency Listing, they are insuring that your house is on MLS for all the real estate professionals to see and that any Realtor can sell your house and get the commission, BUT if your home is sold by any real estate professional, even if that Realtor is a friend of yours who came for dinner and happened to sell your house, your listing broker will get paid the stated commission in the Agreement also. It just sounds like a good deal because YOU can sell your house and not pay a commission. In reality, your home is more likely to languish on the market because the broker is unlikely to put much time, effort or dollars into marketing your home. It's a risk to the broker that you might sell the house and they won't get a commission after spending significant dollars. For Sale by Owner is a difficult real estate sale. Plus, consider how difficult it is for the owner to make the sale if they live in a community where "For Sale" signs and Open Houses are not permitted, such as in many country clubs and gated communities. For example, I live in St. Andrews Country Club in Boca Raton where "For Sale" signs are forbidden as are "Open Houses" for the Public. Note however that Listing Brokers can and should have Broker Open Houses and Broker Tours which are allowed in St. Andrews CC with some restrictions but can give your home enormous exposure to Brokers with potential buyers.
LISTING AGREEMENT TIPS from a Florida Real Estate Professional
1. Ask your Listing Broker to forward you a copy of your Private and Public Full MLS Report on a regular basis (whatever time frame you're comfortable with) along with copies of all advertisements, video, email blasts, open house announcements and web exposure.
2. Insist that your broker give you a week's notice prior to all Broker Open Houses or Open Houses for the Public. You can have time to prepare your home appropriately -- after all, company's coming and they just may have a buyer for your home. Also, it's nice to know what's being done to actively sell your home.
3. Since you are giving the broker the right to receive a stated commission if your home is sold by a real estate professional with both Exclusive Listing Contracts, make certain to list the responsibilities of the broker to advertise and market your home. Don't be timid or afraid to insist on Broker Open Houses and Broker Tours when possible, as well as video, web exposure and print advertising. The time to insist on this is before the Exclusive Listing Contracts are signed; it's too late afterwards when you're upset that your home is not being shown.
Watch for my next blog which will describe examples of exclusions which can be added to the above Exclusive Listing Agreements. Also, future blogs will discuss the different ways that a Listing Broker can market a home and attract other real estate professionals to help sell the home and how a seller can have these broker obligations added to an Exclusive Listing Agreement.
contributed by Kathy Fineman
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