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Signing A Listing Agreement

When you choose a REALTOR®, you will most likely sign a listing agreement - a contract in which you agree to allow the REALTOR® to sell your home during a given period. The agreement says that you will pay the REALTOR® a fee when you sell your home. Most REALTORS® are independent contractors who work for a company operated by a licensed real estate broker. (A salesman is licensed by the state to sell real estate through a broker. A broker is licensed by the state to sell real estate to others for a fee and employ salesmen and other brokers.)

The amount of compensation you pay a broker is negotiable, but the REALTOR® will generally follow the company's policy regarding compensation. The amount of the fee will be spelled out in the listing agreement. Make sure you understand how the fee will be paid before signing.

Exclusive listing
Most REALTORS® will ask for an exclusive right-to-sell listing. This means that you will owe the broker a commission regardless of who finds a buyer during the listing period. In other words, if you decide to sell the house to your cousin, your broker still gets a commission. The advantage of this kind of arrangement is that the broker is motivated to work harder to sell your home.

It's possible that a REALTOR® from another company will find a buyer for your home. In that case, your broker is the listing broker, and the second agent is the selling or cooperating broker. Many times your listing broker will agree to pay the cooperating broker a fee from the amount you pay the listing broker. Your listing broker cooperates with other brokers who procure buyers interested in your property and offers to compensate the other brokers for procuring a buyer. Cooperating and compensating other brokers is discussed in the listing agreement you sign with the listing broker.

Length of listing
The listing agreement will specify how long you agree to list your house with a company. Your REALTOR® will probably suggest an average time that homes like yours are on the market. You want a period that's long enough to motivate your REALTOR® to advertise your home and respond to buyers, yet short enough to allow you to change to a different company if you become unhappy with the REALTOR®'s service. Remember that the listing agreement is a contract. You should get a copy for your records. Your REALTOR® is bound to the terms just as you are. You can expect the REALTOR® to keep appropriate information confidential and effectively market your property. With Charles' love him or leave him plan you can end your agreement at anytime with no Realtor fees before accepting a contract.