The Listing Agreement is a Contract between the Vendor and the real estate agent in which the Vendor gives the agent the authority to offer the property for sale. The contract will have an expiry date, and a price that the agent can offer the property at. It will also state what the real estate commission will be. Most Listing Agreements also have what is known as an "overhang clause", which simply states that the Vendor will be liable to pay a commission to the real estate company if they sell the property to anyone who was introduced to the property during the currency of the listing agreement, even if the sale takes place after the expiry date. The length of time covered by the overhang clause is negotiable, however most companies ask for 180 days. The real estate agent will fully explain all the clauses contained in the Listing Agreement. The main consideration when listing your home is what price to ask. The agent should be able to show you enough information to make you comfortable with this decision. They will show you information on similar properties that have recently sold, similar properties that were for sale but didn't sell, and similar properties that are currently for sale. This will tell you what people will pay for a home like this at this time, what people won't pay for a property like this at this time, and what the competition is. Based on this information, you should price your property slightly above recent sales, but slightly below the competition. This strategy is recognized as the best way to get the most money, in the shortest period of time, with the least amount of difficulty.

The commission rate charged is often a topic of negotiation between the agent and the Vendor. While it is true that the rate is negotiable with some companies, with others it is not. You should look at this as you look at most things you pay for. It is not just the price that's important, but the feeling that you are getting good value.

The length of the listing is another negotiable point. The minimum period that is needed for our MLS system is 60 days, however, the average marketing time for most areas is considerably longer, and most agents would like a listing for at least as long as the average marketing time for your area.

---

Return to: Information Every Vendor Should Know