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Wednesday, August 05, 2015

Do Sellers Need a Long Term Listing Agreement When Selling Their Home?

Do you really need a long term listing agreement when hiring a real estate agent to sell your house? 

I have spoken with many sellers over the years and know from experience many view "long term" listing contracts so differently.   For some, long term is anything over a month!   But, for this discussion, I am using six to twelve months as long term. 

The short and easy answer would be no but...

So why do real estate agents want long term listing agreements?  The listing agreement is the agent's employment agreement.   It says to an agent...I work and accomplish this I get paid down the road

As a Realtor I view a long term listing agreement as an early sign of an owner being committed to the idea of selling  But a long term listing agreement does not automatically show a seller is committed to the process of selling. 

Some of the things a seller can do to demonstrate commitment to the process of selling include:
  1. Preparing their home for the market.
  2. Pricing it reasonable for the market, condition and circumstances of the sale. 
  3. Accommodate all reasonable showing requests.
  4. Choosing a professional real estate agent with local (neighborhood) knowledge, experienced and demonstrated success to market their home.
  5. Working with their real estate agent to do the things necessary to meet their goal.
No place above does "sign a long term listing agreement" appear.

So how long should a listing agreement be?

Every broker/office/agent has a different policy.  That is the good thing about the real estate business.  There are no set fees, listing contract requirements or anything else except for policies set by governmental agencies (and other bodies like the Realtor Association, local boards, etc.)  overseeing industry practices. 

I suggest prospective sellers ask any agent who wants a twelve month listing agreement this question: 
"What will you do in the last six months that are so critical it can't be done or achieved in the first six months?"    If the average days on the market in this area is XXX days, why do you need more than the average?   If the average is XX days then XXX days should be plenty, right?"  Also, what is your cancellation policy if I decide to not sell or  dissatisfied with your service?"
This post is not an indictment of any agent who has a one year listing policy but rather is meant to stimulate questions for consumers when interviewing agents to sell their home.

If you are in Viera or Melbourne, Florida and considering selling your home, call me at 321-693-3850 or send me an email.

As a matter of policy I rarely have a listing agreement for over six months unless a property is unique in some way or will require additional marketing  efforts.

Still, there are circumstances that may require a long term listing agreement such as a short sale or others and should be discussed when interviewing agents.

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