If you’ve decided to work with a real estate professional to sell your home, one of the first steps is negotiating and signing a listing agreement. This contract outlines the terms of your relationship with the agent, including how they will represent you and market your property. Here's what you need to know about this important document and the choices you have when working with a real estate agent.
What is a Listing Agreement?
A listing agreement is a contract between you and your real estate agent that allows them to market your property and represent you in the home-selling process. This agreement also establishes the sales price for your home, outlines the services your agent will provide, and details how they will be compensated. Keep in mind, agent compensation is fully negotiable and not set by law.
Options for Agent Representation
There are several types of listing agreements you can choose from, depending on your needs and the level of service you want from your agent. Here are some common options:
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Exclusive Agency Listing Agreement: In this arrangement, you work with one agent, but you retain the option to sell your home yourself. You only owe compensation to the agent if they sell the home.
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Exclusive Right-to-Sell Listing Agreement: You work with one agent, and they are entitled to compensation no matter who sells the property—whether it's you or another party.
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Limited-Service Listing Agreement: This option provides minimal services from your agent, such as listing your property on a Multiple Listing Service (MLS). However, they may not assist with showings, offer negotiations, or the closing process.
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Non-Exclusive Listing Agreement: You can work with multiple agents under this agreement, and you only pay the agent who successfully sells your home.
Services Included in a Listing Agreement
A listing agreement will outline the methods your agent will use to market your property. This might include:
- Listing your home on an MLS, a platform that showcases properties for sale to potential buyers.
- Offering a seller concession, which covers certain costs for the buyer to make the sale more attractive.
- Offering compensation to the buyer’s agent.
To learn more about MLS, offers of compensation, and seller concessions, check out NAR's consumer guides at facts.realtor.
Are Offers of Compensation Required?
No, you are not required to offer compensation to a buyer’s agent. It’s up to you to decide if offering compensation is the right strategy to help sell your home. REALTORS® can guide you through the pros and cons to help you make an informed decision.
How to Choose What’s Best for You
When working with a REALTOR®, you are partnering with a professional bound by the REALTOR® Code of Ethics. Your agent is committed to acting in your best interest, helping you navigate the complexities of the market, and tailoring their services to meet your needs. If you have concerns about the agreement or need clarification, it’s always a good idea to consult an attorney.
Since real estate practices can vary by state, it’s essential to work with professionals familiar with your local laws. If you’re selling a home in New Jersey, our NCJAR REALTORS® are here to help! For more information and resources, visit ncjar.com.
By understanding your listing agreement and choosing the right type of representation, you’ll be better prepared for a smooth home-selling experience.
