A person who wishes to sell their property usually
signs a contract with a real estate company. The contract is called an
Exclusive Seller Representation Agreement. This agreement is the
initial contract between the seller and the realtor and signing such a
contract without having precise knowledge of its content could be a
costly mistake. At worst it could mean that no one else, including you,
will be allowed to sell your property without the realtor getting a
commission.
Exclusive Seller Representation Agreement
You’ve always been warned to ‘read the fine print,’ and for good
reason. Some of us tend to check the main points we want covered and skim
over the rest, trusting that we are dealing with honest people.
Contracts are, by their very nature, obtuse and hard to read. When you are
selling one of the biggest investments you have obtained in your life, it
is truly important that you read the fine print!
Content of the Contract
There are variations from state to state and the contract may be called
something other than an Exclusive Seller Representation
Agreement. By whatever name, a rose is still a rose. To sell your property
through a realtor, you usually have to enter into some sort of contract
with the realtor.
The Exclusive Seller Representation Agreement can cover such
common subjects as:
The seller is retaining (hiring) the realtor to sell their
property.
The amount of time that you will allow the realtor to attempt to
sell your property - In general, a realtor will attempt to sign you up
for an entire year. Do you really want the realtor to own the right
to sell your home for that long? Realtors may dislike a shorter
time period, but you can specify as little as 3 months. In this day and
age, advertising your home is almost instantaneous so stand firm and
don’t let the realtor bulldoze you. Besides, the realtor has an ace up
his sleeve usually hidden under the Brokerage Fee (more about that
later).
The property address and legal description.
The price, down payment, acceptable selling terms.
Title and Existing Encumbrances – Any loans or liens you have
against the property.
Multiple Listing Service Authorization – Allows the realtor to put
your home and information about your home on the internet; a real
plus as your property is instantly advertised on the world-wide
marketplace.
Duties of the Realtor – Your protections under this contract should
be addressed in depth, including the realtor’s confidentiality duty to
you.
Information Warranty – The information you give had better be true,
don’t try to hide things; it could cause problems laters.
Transaction Related Services Disclaimer – If the Seller (You) hires
someone that the realtor suggests to fix a problem and it creates even
more problems then the realtor is not to be blamed. For
example, if your pipes are leaking and the plumber that the realtor
recommended destroys your hot water tank, you can’t sue the realtor. Don’t
rely on the realtor’s advice; investigate any professionals before you
hire them.
Included Items - Don’t think you can take your great-grandpa’s wood
stove or your prize rosebushes; items attached to the real estate are
automatically included. Make certain you clearly state those items
excluded from the sale.
Severability – If an item in the contract is found to be invalid,
the remaining provisions are not impaired. In plain English, if the
Seller or the realtor makes some sort of error it doesn’t necessarily mean
the entire contract is void.
Any number of subjects and/or conditions can be covered in a real
estate contract and you must take the time to read and understand all of
them. There are ways you can protect yourself and retain the right to
eventually fire your realtor in the event you feel it necessary to do so.