Before You Sign That Listing Contract, Read This

I am writing this blog with the hopes of saving many home owners a lot of aggravation, stress, time and attorney fees.

Before you sign the listing contract with that Realtor you have been so gracious to allow in your home, there are some very important things you should be aware of.

1. Make sure the listing contract is a PAR form (Pennsylvania Association of Realtors) If you do not see that anywhere on the contract. Do not sign it. That means that that listing agent's Broker's office created their own contract which could contain clauses that may take away your rights.

2. Make sure that the contract says what you agree upon. If the Realtor told you the contract is only for 6 months make sure it states a start date and and end date equalling 6 months and nothing more.

3. If the you agree to a 1 year listing contract, make sure the contract does not exceed 1 year. It must expire exactly 1 year from the start date otherwise it is not valid. Do not let the Realtor intimidate you into believing that they can list your home for anything beyond 1 year. One important fact worth mentioning is that there is no need for a 1 year listing. If your Realtor prices your home properly and realistically, your home should sell. If not, it's time for a new Realtor. Keep in mind that you also must be realistic with your listing price.

4. Make sure the amount of the commission is what you agreed to pay. You as the home owner have the right to decide just how much of that commission your Broker receives. If you only want your Realtor to receive 2% and a buyer agent to receive 4% then make sure it's in the contract that way. Spell it out. Any reasonable request that you want your Realtor to do or be responsible for must be in writing in the listing contract otherwise it was never requested.

5. Make sure there is no variable commission rate written into the listing contract. For example seller agrees to pay between 2%-8%. That is ambiguous at best. Make sure it is a fixed commission fee written into the contract. For example a total of 3%.

6. Make sure the listing price matches what the Realtor is agreeing to list your home for.

7. Make sure there is an exit strategy. What happens if your Realtor is not doing what you hired them to do? How do you fire them? What will be the consequences to you if any?

Understand that the Realtor you hire does not own your listing. The Broker of Record of that office owns your listing so if you do have an issue with your Realtor, find out who the decision maker is, your Realtor or their Broker. The last thing you need if a problem should arise is to get the run-around. Trust me, this happens all to often.

I felt the need to put this out there due to the many phone calls I keep getting from home owners who hired a Realtor to list their home and then felt that their Realtor was not doing what they were hired to do or that the paperwork wasn't what they thought they agreed to. Remember, you do have the right to take a day or two to review the paperwork. You do not have to sign the paperwork that same day. If you like the Realtor and you feel like you want to hire them, just tell the Realtor your intentions to hire them but that you need time to re-read all of the paperwork again and perhaps write down more questions for them. A professional Realtor who has nothing to hide, will have no problem with this reasonable request.

Not every Realtor is out to get you. There are many, many great, honest, ethical, loyal Realtors out there but as with any profession, there are many bad apples in the bunch. You should just be aware of what to look for. Remember, the more you know, the better off you will be.

It is your legal right to have an attorney review the listing contract before you sign and the Realtor should have no problem with that. When in doubt contact an attorney.

I hope you find my blog to be helpful. If you should have any questions, feel free to contact me.