Use Listing Agreements When Selling Your House

Sometimes I decide to use a real estate agent when I'm thinking about how to sell my house. Even though I can actually do the job very well myself because I'm an investor and have sold many of my own houses, sometimes it's just easier to hire an agent. One thing I've learned in my dealings with various agents is that there is more than one kind of listing agreement for selling a house. That is not a well-known fact, so in this article I'm hoping to shed some light on the whole subject.

When I learned about different types of listing agreements it changed the way I do business because it gave me more freedom. This knowledge can give you freedom, too. The two most common listing agreements are called an Exclusive Right to Sell Agreement and an Exclusive Agency Agreement. Just looking at those phrases can be a little overwhelming, but after some explanation it's going to make perfect sense when you are ready to sell a house.

One thing to keep in mind is that real estate laws are different in each state, so you need to understand that I'm making some generalizations here from my own experience and it may be different where you life. Of course you'll want to check on the laws in your particular state. An Exclusive Right To Sell Agreement is the most common listing agreement, and it's the one you have probably seen if you've sold a house with an agent in the past.

Your agent helped you understand that basically you are giving her the right and the responsibility of finding a buyer and closing a sale, and that no matter who finds a buyer she will be entitled to a real estate commission, a certain percentage of the sales price that is stated in the agreement. Logically, most agents are not going to be motivated to pay for advertising and to put in the time required to show your house without some assurance of getting paid a commission.

If you have an acquaintance or family member who has shown an interest in buying your house you can "except" that person from your Exclusive Right To Sell Agreement, meaning actually give that person's name to the agent so that you are protected from the obligation to pay a commission if that person buys your house. But your agent may not be as motivated to work for you with an exception in place. The other type of listing agreement called an Exclusive Agency Agreement specifies that your agent will receive a certain percentage as commission if she or any other real estate agent brings you a buyer who closes a sale on your house. However, and this is the big news I saved until last, you still have the right to sell your house yourself without paying a real estate commission.

Just remember, you will have to provide your own sales agreement and other forms, and your agent will not be obligated to help you in any way. You will be on your own! This can be a good arrangement for investors, as it is for me when I'm considering how to sell my house, but it can be a nightmare if you're unfamiliar with the legal forms and the process. Best to pay your agent to do the job she's qualified to do for you.


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Leo Kingston has been buying and selling homes in the Oklahoma City area for nearly 3 decades. His company, 18002sellhomes, offers house owners in the OKC area a method to sell a home quick for cash without the need of a Realtors services.