When you hire a real estate agent to sell your home, you’ll need to sign a contract, known as a “listing agreement.” No big deal, right? Well, maybe not . . .
You may be surprised to learn that most agents will present you with a contract for a minimum period of ninety days, and sometimes up to six months!
Your agent will justify the lengthy listing duration by arguing that since they have to put so much effort into the listing up front, (ie: taking pictures and measurements, setting up the MLS, implementing the marketing program, etc.), they need the longer time on market so they have the chance to recoup their expenses.
This argument may seem logical, but what does it mean for you, the seller?
Well – have you ever seen homes in your neighborhood that have been for sale for months without selling? Have you searched online for homes for sale and seen pictures that were obviously taken two seasons ago? It seems strange to believe, but a good number of agents will put a house on the market, and won’t worry too much if it sells quickly or not. Part of the reason is that, with a long listing duration the agent hopes that sooner or later, the seller will eventually lower the price and the house will sell.
Since most of the “marketing” efforts are done and paid for up front, the agent will just wait, believing that sooner or later the seller will get desperate enough to drop the price, and he’ll get his paycheck. Sometimes this happens, sometimes it doesn’t (as evidenced by the thousands of listings that expire every month unsold.)
Naturally, this turns into a disaster for the seller! Just imagine being one of these poor homeowners, locked into a six-month listing contract with one of these lazy real estate agents. The pictures your agent put on the MLS are unappealing and outdated, you don’t know if you’re still priced correctly, and nobody has come by to tour your home in weeks. You’re hoping to get moving on your future – selling your house, maybe buying another, but you’re stuck for another three months, locked in to a contract that you can’t get out of. And when your home listing finally does expire – (and you can hire a different agent) – you run the risk of getting tied down into the same situation all over again!
Fortunately, there is an easy way for you to maintain control in this situation – you simply need to insist on a cancellation clause before you sign the listing agreement.
Simply explain to your agent that you fully expect her to do a great job, but in the event you’re unsatisfied, you wish to retain the right to cancel the contract. Then, have written into the contract, language to this effect.
(I personally prefer language that allows you to cancel at any time for any reason – but some agents may not be so agreeable.)
Although very few agents will offer up a cancellation clause on their own, some will be willing to agree to it if you ask. If your agent refuses to allow a cancellation clause in her listing contract, no problem – just find a different agent who will. If you need a recommendation, you could just look here.
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