By Kay Wilson-Bolton
August 10, 2006
REALTORS® are all too aware that the words we use can also become the words that the public uses. An example is the term for the form that is used when someone hires a REALTOR® to “list” or sell their home.
The casual term is “Listing Agreement.” However, it is important to note, particularly in this market of longer selling periods (translated to more days on the market), some sellers believe that their agent or REALTOR® is not doing enough to cause their home to be sold. The name of this “agreement” is Exclusive Authorization and Right to Sell.
A growing number of calls are coming in to REALTOR® Associations from sellers who want their agent or REALTOR® to “cancel the listing agreement.”
The reality of Listing Agreements is that they are more than agreements to work together; they are contracts with binding agreements on both parties. The document clearly defines the duties of each party and the consequences if they don’t perform.
For example, there is a clause in the Exclusive Authorization and Right to Sell Agreement that provides for what happens if the property fails to sell within the designated listing period. That period can be three months, three days, or as the market becomes more normal, six months because homes are taking longer to sell.
There is a protection period in the contract that provides for the broker to be paid if a buyer who was shown the property or made an offer to purchase the property during the listing period shows up again and completes a purchase.
There is a requirement, however, that the names of such parties be provided to the seller in writing within three days of the listing expiration.
Further, on each Exclusive Authorization agreement, there is space for a seller to note any previous brokers and whether or not any names are protected under the previous agreement.
This put the new broker on notice that some clients have been excluded from the new listing agreement, and protects the seller from paying two commissions.
There is also a provision that states that commission could become due and payable in the event , “without broker’s prior written consent, the property is withdrawn from sale, conveyed, leased rented, otherwise transferred, or made unmarketable by a voluntary act of Seller during the Listing period or an extension.”
Demanding that the broker pick up the sign and remove the keysafe does not cancel a contract. It takes two parties to make one, and two parties to cancel one.
It is imperative that the seller meet with their agent, air their discontent and hear the responses. If the conversation is not satisfactory, sellers need to call the broker or the manager and have a discussion.
Listing Agreements are contracts and are not subject to termination just because someone has another idea.
A seller recently asked me if there was anything specific in the Exclusive Authorization Agreement that she should read in detail.
My response was, “all of it.” Today I begin to call documents by their real names and not the familiar ones. It will help all of us realize that buying and selling homes is serious business that can actually be fun when everyone is well informed.
It is becoming more and more imperative that customers use the services of knowledgeable REALTORS®. Take time to interview at least two before selecting one, unless one comes to you with recommendations from someone you trust.
Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and brings a regional perspective to local issues. She can be reached at 805.340.5025