After you've made up your mind to sell your home, the next thing to do is to contact a Realtor to draw up a Listing Agreement which is a contract between you, your Realtor and the real estate office he or she represents. It must clearly outline the rights and obligations of all parties and define clearly what is and is not included in the transaction to ensure there are no misunderstandings.
Once signed by both parties, it becomes a legal agreement that binds both parties to all its terms and conditions. Therefore it is exceptionally important you understand and agree to all the clauses to avoid any possible future conflicts. Also, ensure you receive a copy of any document you sign.
Generally in this agreement, you appoint a specific Realtor and firm to act as your agent in attempting to:
- Find a purchaser and determine a reasonable asking price for the property.
- Establish a commission rate or fee (usually payable when the property changes hands).
- Decide whether or not a lockbox and signage will be put on the property.
- Agree to a number of days that may be required to complete the sale after acceptance of an offer.
- Determine the period for which you will list your property for sale.
Each of these items are important to you, and your Realtor should be of assistance here in telling you what is the normal time frame and protocol.
The agreement also discusses "agency" - the manner in which you will receive representation from your Realtor. That should be discussed with you before you sign the Listing Agreement and only after an Agency Disclosure Acknowledgement form has been shown and explained to you.
A third part of your Listing Agreement is the completion of a data sheet which basically describes everything about your property such as the type of heating, zoning, construction, exterior and interior finishes, room sizes and descriptions, basement development, parking facilities, lot size, and more.
It generally lists all items a potential purchaser would find of interest. This is the information that all Realtors will be given through the MLS System. It may also state what movable items are not to be included in the sale (items that are attached to the property generally remain with the property when sold).
A optional part of a Listing Agreement, but one I always recommend, is the completion of a Property Condition Disclosure Statement in which you are asked to disclose any and all property deficiencies in any of the following areas - water supply and sewage system, electrical, plumbing and heating systems, structural, mechanical, municipal and environmental concerns.
This information can, and often will, be given to prospective purchasers so that they know in advance what possible repairs may have to be made should they purchase the property. Knowing this in advance of a sale is much preferable to having the sale fail later as a result of a home inspection. The purchaser who knows about any concerns with a property, but still offers to buy that property is much more likely to complete that sale then is a purchaser who discovers problems later.
Being up front by fully disclosing any concerns with your property is your best bet.
Additionally, it's wiser to repair or correct these problems before the sale then it is to have them result in a cancelled sale. The old adage, "An ounce of prevention is worth a pound of a cure," certainly would apply here.
Now you Realtor begins the job of advertising your property to all other Realtors and the general public in the hope of getting you a firm offer to purchase.
Remember, the more you know about the factors affecting real estate transactions, the wiser your purchase or sale will be!
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