Over the years, I've encountered situations where sellers are hesitant to sign an extended listing agreement without a clear understanding of the services their listing agent will provide. And you know what? They're absolutely right to be cautious. Depending on the time of year, my listing agreements run an average of 60 to 90 days. I’ve visited with sellers who have encountered situations where they have been asked to sign for 6-12 months, and then were frustrated with a lack of action.
Extended listing agreements are a common practice in real estate, especially in a competitive market or with a luxury/unique home. These agreements extend the duration of the listing beyond the standard 60 to 90 days. While they can be beneficial for both sellers and agents, they can also be a source of concern if not properly understood.
5 things to keep in mind when it comes to listing agreements:
1. Sellers should verify the services they'll receive to ensure that their expectations align with what the listing agent will deliver. Verifying the services provided in the listing agreement, can reassure sellers they are getting the value they deserve. It's also an opportunity for a listing agent to demonstrate their commitment to transparency, professionalism, and adding value to the process.
2. Sellers should ask for a marketing plan outlining how the agent plans to promote the home. Will there be professional photography, virtual tours, social media advertising, and open houses? Clarity on these aspects is vital.
3. Sellers should discuss how often they'll receive updates on the status of their listing and how they can reach out to the agent with questions or concerns. Effective communication is the foundation of a successful partnership.
4. Understanding the pricing strategy is crucial. Sellers need to know how the agent arrived at the recommended listing price and what data was used to support the recommended price. Pricing is essential to the success of a listing. Pricing a home too high “so we can negotiate” often results in a lack of interest, showings, and languishing on the market without finding a buyer.
5. The listing agreement should specify the length and any associated terms, such as commission rates and cancellation policies. Clarity on these matters can prevent misunderstandings later on.
In my business, I feel trust and transparency are paramount. Sellers should never feel pressured into signing any agreement without a clear understanding of what services they will receive. Take the time to discuss and verify these services to ensure a successful and stress-free experience.