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How To Negotiate With A Listing Agent
By Matt Unangst, 23 Jan 00:49
Here are some important things to think about when negotiating with a listing agent:
• The length of your contract
Many listing agreements require that you do not list your home on your own or with another agent for six months. Unless the housing market in your area is dead, your home should sell well before then if it is marketed well and priced reasonably. If you are willing to price your house aggressively, you can probably do fine with just a 60-90 day listing.
• Post-listing period sales
Contracts with real estate agents often have clauses that allow the agent to receive a full commission if he/she delivers a buyer after the listing period has expired. You should request that such a clause be either removed from your contract or shortened in term.
• Hidden fees
Read your contract thoroughly to make sure that you are not being charged for anything extra. Pay special attention to fees for “administration” or “document preparation.”
• Payment
Some contracts stipulate that the agent will receive commission if he/she delivers a buyer, even if the deal later falls through. You should make sure that any payment your agent receives comes out of your closing proceeds.
A payment program that is sometimes used to give an agent an increased incentive to get the most money for your home is tiered pricing. Tiered pricing usually consists of an hourly rate for the seller’s agent, a flat fee for the buyer’s agent (usually around 2 percent), and an added incentive. An example of an incentive would be a percentage of the price for your home that is above the price at which it was listed.
• Conflict Resolution
Your contract should specifically state how conflicts are to be resolved. Binding arbitration is a common procedure. It is quicker and cheaper than going to court, but you lose your right to hire an attorney and file a civil suit.
It is important to remember that all of these issues must be resolved before you sign your contract. Be certain to get everything you agree to with the agent in writing. Verbal agreements are not binding.
Another thing to think about is that there are different kinds of listing agreements. An exclusive agency agreement allows you to sell your home on your own without paying any commission. This is far less common than an exclusive right to sell agreement, which guarantees the agent’s commission no matter how the sale is made.
Be creative in negotiating with your agent. Figure out the agreement that gets you the most money with the least stress.
KEYWORDS: real estate, listing agent, real estate commission, binding arbitration, tiered pricing, exclusive right to sell, exclusive agency
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Tags: listing agent real estate agent broker