Completing a Listing Agreement

What is a Listing Agreement? It is a contract between you and the brokerage company that I represent. It is a framework for subsequent forms and negotiations. It's important the agreement accurately reflects your property and clearly spells out the rights and obligations of all parties, what is included and what is not included in the sale.

The Listing Contract performs three basic functions. First, it establishes the agency relationship between the broker and the homeowner. Most importantly, it outlines the limits within which the broker may act. For example, it states how long the contract between the broker and homeowner will last. Secondly, it provides the details of your home. These details provide other REALTORS and prospective Buyers with information that will assist them in determining if your property is what they are looking for. For example, is the garage attached or detached? These details are particularly important to a Multiple Listing Service (MLS) listing because the Buyer’s REALTOR may work for another company and may not have ever seen your home. Finally, the Contract provides the framework for an initial offer from a prospective Buyer. For example, when an offer is submitted, the legal description and list of items to be included with the property will be based on this detail. The form itself is usually comprised of a number of components.
What happens? We will both sign the listing agreement and each receive a copy. The agreement binds both parties to its terms and conditions. Whether or not you wish your lawyer to review the agreement, you should in any case let him or her know that you are selling your home.

The Fine Print

Generally, in the agreement:

• You appoint the brokerage company as your agent and it gives me the authority to find a purchaser;
• The duration of the agreement is indicated; and,
• The compensation is set out (generally, you pay this only upon closing or when the house changes hands).

The agreement also:

• Sets out the listing price; and,
• Describes the property you are selling - lot size, building size, building style and materials, floor areas, heating/cooling systems, room sizes and descriptions.

Here you decide what you are taking with you and what you are leaving with the house. Generally, unless stated otherwise, fixtures remain with the property, while chattels -- things that are movable -- are not included in the sale.

And finally, the agreement gives the financial details:

• Mortgage balance;
• Monthly payments;
• Due dates for all mortgages.
  The Mortgage Verification Form. This will allow me to confirm any mortgage details on the property. Buyers may be more interested in your property if there are attractive terms or rates on the existing mortgage. For example, the mortgage is assumable and it is at a good interest rate compared with current interest rates. You may also wish to port this mortgage to your next residence if your lending institution permits that.
• Annual property taxes; and,
• Any easements, rights of way, liens or charges against the property.
  Real estate boards are asking homeowners to complete what is commonly known as a Property Condition Disclosure Statement (PCDS). This is a document that the homeowner completes and signs disclosing anything he/she may be aware of, but may not be readily apparent to the potential Buyer. For example, is the lot subject to flooding, are there any easements over the property, are there any structural problems with the home etc. When the offer does come forward, it is usually conditional on you completing a PCDS that is satisfactory to the Buyer. Completing this form may also prevent you from being sued later, in that the new owner cannot claim he/she was not made aware of any actual/potential problems with the property.

Types of Listings

Exclusive Listing: You appoint one firm to act as your agent in the sale of your house. This firm usually has the sole, irrevocable and exclusive right to sell your house for a given period of time.

MLS® Listing: This is a type of exclusive listing, allowing me as your REALTOR to work with other REALTORS through your local board's MLS® system and give your property maximum exposure. This type of cooperative effort may result in sharing the commission with any “outside” selling agent.

What is the MLS® System?

The MLS® system is a cooperative listing service operated by our local real estate board. Your properties, and other properties, are listed on it.

How can the MLS® System Help Sell My Home?

Complete details of your home are sent to all the REALTORS in your area, usually within 48 hours, via modern technology. Your property gains more exposure, because it reaches the majority of the real estate professionals in your community; and, through mls.ca, the national MLS® Internet website, participating local real estate boards can advertise their listings to potential Buyers across the country and around the world.

Renewing the Listing

Sometimes a home does not sell right away. Avoid the urge to pull your home off the market. Generally, there are three reasons why a home may not sell as fast as others:

• Location
• Condition
• Price.

Naturally, you cannot change your home's location, but you can fix the condition of your home and you can, of course, adjust your price. Throughout the listing process, I will inform you of your current competition, comparing your asking price against those of similar properties in your area. We will review your selling strategy regularly, taking into consideration:

• Is your house being shown regularly?
• Are you receiving the feedback from prospective Buyers?
• Are you in touch with the marketplace?
• Is your property competing well? If not, what else can we do?

I will work with you to develop the best possible strategy for selling your home.

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