If you could write your own listing agreement ~ or have input in what a listing agreement should contain ~ what would you add or delete? What do you like or dislike about the listing agreement you are required to use by your company?
Would you add/delete language regarding automatic price reductions?
Would you add/delete a cancellation fee?
Would you add/delete an administration fee?
Would you include the disclosures as part of the listing agreement (as attachments) so you aren't having to deal with so many different pieces of paper?
One of the things that I am always frustrated by is that the listing agreement I use is confusing to sellers, it's very small print, and it doesn't contain enough space for writing in personal property inclusions/exclusions.
What about you?
Kelly, Our listing agreement and data entry form are both on 1 legal size page. This I do not understand. On the West Coast they were two different forms as I would change that here.
Have a Fabulous Real Estate Day!
Anona
Judy: I'm with you on that one!
Anona: I would do away with legal sized documents altogether. I would also do away with those pressure-copy forms that you can't read anyway.
Margaret: Thanks!
Gary: I'm glad you like yours...we have several we can choose from, but none are perfect.
I do add my own language about price reductions. If a seller isn't willing to do my number at the time of listing I only take the listing if there is a built in reduction on the agreement to kick in generally after 30 days
How are ya?
Kelly, actually, you can add whatever language you'd like, and so can the sellers! There's a contract clause committee in our local Board, and I admire the people with the patience to get onto it!
NH contracts are fine.
Patricia Aulson/ Realtor Hampton NH Real Estate
Kelly, I think generally our listing agreement is fairly comprehensive. However we do have a listing addendum which can be used to add other terms. I personally like the idea of the built-in price reduction after 30 days.
Desiree - could you share the language you add about the price reductions? I would love to incorporate something like that into my listing agreements.
In North Carolina, I would love it if we had listing agreements (and contracts) specific to region or area of state. There are some things that are big issues say, in Asheville, that we never even have to deal with here in Durham (radon gas comes to mind). It's hard trying to explain why something is in an agreement that doesn't apply to your client, and that you have no experience with.
Dez: I'm good - how are you? We have flexibility to add whatever we want as well, but wouldn't it be great to have it all neatly encompassed in one document?
Patricia K: Yes, that's true! But there's never enough space to write in specifics & the print is too small.
Patricia A: Great!
Colleen: That seems to be the #1 thing agents are looking for.
Tamara: That's a great point. Thanks for sharing!
Sally: Wonderful! Do you think it would be useful for some of the items that we are seeing more commonly to be incorporated right into your listing agreement?
Tamara - Here's my general clause I use
next to the list price I put a *
* Seller agrees at 1/1/08 if property has not received any written contracts, the list price will be ADJUSTED to $250,000.
I would have them initial next to that paragraph and i strongly recommend using the word adjust versas reduce sellers are more receptive. Let me know if you need anything else
How about some kind of specific information that the Seller can hold you accountable for.
Like EXACTLY what kind of marketing dollars you are going to spend marketing that SPECIFIC property.
Or perhaps allowing the Seller to cancel the Contract if they sell it themselves and not be obligated to pay you if you do not sell it...
Or better yet, just click the link below to see what we think a Listing Addendum should have to protect the client and ensure that the agent actually EARNS their commission.
The print on Louisville, KY contract is too small, as they tried to jam it all on one page.
The biggest oversight, IMHO, is they never clearly define the 'I', 'we', 'they', 'you', and 'me' terms and it is very hard to explain to clients which pertains to who when in the body of the contract. I think they should put wording like (sellers) and (agent) behind where we initially input our names, and then use those specific terms instead of the above throughout the contract.
Oddly enough, so many customers don't or won't read the details of the contract that it ultimately doesn't matter. A telling comment on how people do business...
Hi Kelly,
I actually do add something in to my listing contracts under the Additional Terms & Conditions: If seller terminates contract prior to expiration date, there is a $750.00 fee.
I had too many sellers who would panic once the house started getting shown and decided they didn't want to sell after all. Meanwhile, I had spent a great deal of time and money in advertising the home. I actually had one client who was extremely against this and told me it ultimately was her decision in hiring another agent. I had done my homework before meeting with her though and saw that she had already listed her home with two other agents before calling me. And I kept track of the listing afterwards. She used THREE more agents after we had met..the one she hired instead of me for only 30 days. Then moved on to someone else for 90 days. And then yet a third person for awhile before just taking the home off of the market completely. To this day that home has not sold. I don't regret not taking that provision out one bit! To me, it is a red flag is a seller is that worried about it in the first place.
Washington State listing forms are fine. One page listing agreement, three pages for residential input. Five page Sellers Disclosure form. Very user friendly and easy to read and easy for sellers to understand.
Hey, Hey Kelly -
I use a very similar Listing Agreement to yours (Chicago Association of Realtors Form), so your thoughts are very relevant to me!
Now, with IL Disclosure, Lead, Mold (optional, but recommended), Lead Paint, and Radon, the entire listing document process has gotten rather lengthy, but you have to follow the law, and can't shortcut here.
These days, I definitely have an "on market" date on my listing agreements, in case the house is not quite ready to show right now.
I also include an out clause - but different than the "you don't like me, I will tear up the contract" provision. Instead, we will REFER THEIR BUSINESS to another Full Service/Full Fee Licensed IL Realtor, for a REFERRAL FEE to our company, if they want to terminate early. Cal or write for the exact copy.
I like the auto price reduction idea - but you might have to keep things open for MULTIPLE price reductions - "Seller Authorizes Listing Agent to reduce asking price by a maximum of x%, at their sole discretion, if no Offer to Purchase is generated within any 14 day period," although most will put up resistance to this.
Marketing fees - I am not really for them, although some companies have required them. Cancellation Fees which are small may actually encourage cancellation for silly reasons - and I believe the contract protects you if they "lock you out" or get nasty. Also, see my thoughts on referring the business if not satisfied, above.
Call, write, or stop in our Lincoln Square Chicago Office, anytime!
DEAN & DEAN'S TEAM CHICAGO
Wow - one page listing agreements? I am so jealous! Here in MO the state listing agreement is six pages long! The sales contract is six to nine pages long!
I am on the forms committee as well for the state, but I still have a whole list of things I would change: have a check box specifying a fee for termination prior to closing. I would specify in the contact if certain personal property stayed - not just on the data sheet - ie propane tanks are a huge issue here.
I would also add a mold disclosure form.
On the selling side, in MO we need a form for the buyer to sign if they choose not to have a home inspection, termite inspection, appraisal.
Kelly - We will write in price reductions. And certainly list for a year. We have never written in a cancellation or administration fee, but in retrospect with some of 'em in particular, we should have. Good post, good question.
best
Wow ~ I logged on this morning to find that this post got featured! Thanks!
Dez: Thanks for sharing the language you use with the rest of us!
Brett: Thanks for your input. I agree with most of what your addendum states, however, you are right that I would not sign it. I believe in disclosure and honesty. I don't believe that what I spend on advertising correlates to the fee I charge. Just like other professionals, we are being paid for our expertise, time, etc. in addition to reimbursement for actual costs. My clients are informed prior to listing with me exactly what I will do for them. They are provided with ample links and reports & copies of documents. Many of my clients have stated that they get way more information than they ever thought they would receive. They are also able to cancel the listing at any time if they do not feel that I am doing what I said I would do. BTW, an agent ONLY gets paid when the house actually sells, unless of course the seller has chosen a discount or fee-for-service broker who charges an upfront fee. I don't do that.
Joe: You are correct. Many sellers don't read the document. I go through it to explain it to them, but I don't think I've ever had one seller actually read the whole thing.
Andrew: Our listing agreemetns are standardized too, but offices can also choose to create their own. Plus, there are several different versions out there.
Bill: When sellers choose the price, against the advice of their agent, it would be nice to have that in writing to back you up later when you ask for a price reduction.
Sarah: I agree with you. We are supposed to have the listing input within 72 hours of signing the listing agreement, but sometimes you want to sign the listing now...and then the seller gets the property staged or whatever. You should be able to sign the document now, but have a date that the seller wants it input into the mls on the form.
Karl: That's great!
Cindy: Great!
Dawn: I know what you are saying. Most of the advertising dollars are spent in the first few weeks and we don't usually recoup that expense if the seller cancels - even if it has nothing to do with us or anything we did. I don't charge a cancellation fee as of yet.
Cathy & Gary: Great!
Gary: It is hard to incorporate everything into one document. But through discussions, the agreements get better all the time.
Dean: I agree with everything you wrote! Thanks for sharing!
Wayne: That is a great idea...being able to increase the font size if desired!
Debbie: Very good points. We have a mold disclosure here. Good ideas on the buyer's side, too.
Gary: Yes, that's why I don't currently use a cancellation fee. I've rarely had to cancel or been cancelled on - is it just the cost of doing business? I don't know the answer to that one yet.
Terry: Too many documents! Can't they make the diclosures all part of one document instead of separate ones for everything?
Kelly you wrote in response to my comment the following:
Brett: Thanks for your input. I agree with most of what your addendum states, however, you are right that I would not sign it. I believe in disclosure and honesty. I don't believe that what I spend on advertising correlates to the fee I charge. Just like other professionals, we are being paid for our expertise, time, etc. in addition to reimbursement for actual costs. My clients are informed prior to listing with me exactly what I will do for them. They are provided with ample links and reports & copies of documents. Many of my clients have stated that they get way more information than they ever thought they would receive. They are also able to cancel the listing at any time if they do not feel that I am doing what I said I would do. BTW, an agent ONLY gets paid when the house actually sells, unless of course the seller has chosen a discount or fee-for-service broker who charges an upfront fee. I don't do that.
I have GREAT issue with what you wrote. We will discuss this at length on our radio show today and in a later blog posting. This kind of thinking is EXACTLY why realtors are looked at so lowly by the American consumer.
1. Advertising and marketing is EXACTLY why a Seller utilizes an agent. Even the hallowed NAR says as much. Are you telling me that the clients you speak with do not ecpect you to market their home? Your "fee" is most assuredly tied to the level of marketing you are supposed to be doing on a home.
2. Why is it that realtors always try to compare themselves to "other" professionals. That is even more absurd than the issue of non-marketing. In this limited space I will not say more than for a real estate agent to compare themselves to a doctor or lawyer or accountant is really someone having an over inflated sense of self worth.
3. Your expertise and time....Industry averages indicate the average time spent with a Seller by a Listing Agent is 10 hours."? The average time spent with a Buyer by a Buyer's Agent is 15 hours. Enough said.
4. Reimbursement of expenses...??? Umm..there are costs associated with doing "business" At the end of the year those costs are tax deductible. Mileage, gas, even dry cleaning...but you know what, I don't think anyone would even have a problem with that. The problem is, most agent's mathematical calculations. When I speak to my attorney he can tell me within a quarter hour how much time we spend on the phone. He can tell me how much it cost to draft a contract or agreement..agents use terms like expertise and time and talk about time in hUGE genralities. If by NAR standard research it has been determined that the average time spent on behalf of a Seller..is 10 hours and the rest of an agent's services are valued at $1,400 at the most...what is your client paying for if you are not marketing the property and your "fee" has nothing to do with your earnings?
This type of thinking will be the downfall of the real estate business model as we now know it...which may not entirely be a bad thing.
Kelly,
As I mentioned, we will be discussing this post at length today on our radio show. Not one to be one sided, if you would like to be a guest on the show we would love to have you. I would be remiss in my equity not to invite you to tell your side of this issue. As the show is broadcast nationally and our blog has quite a bit of traffic, I would gladly afford you the opportunity to respond.
And..no..we are not mean or disrespectful to any on-air guest as Bob here from Active Rain would attest as he was on last week.
I respect different opinions
If you want to, feel free to email me at questions@realestateradiousa.com or give us a call.
Brett: I don't wish to debate with you over what I do, what I charge, or how I do it ~ nor do I feel the need to defend myself or any other real estate agent. But I will respond to each of your points above since you made some inaccurate assumptions.
1. I never said my fee was not correlated to how I advertise or market a home. Of course it is. But there are many components to marketing and advertising that I may not actually "spend paper money" doing. Such as writing ad copy, showing property, preparing market analysis, putting up signs, preparing brochures, taking photos and so on and so forth.
2. Real estate agents are professionals. Plain and simple. We are specifically educated in our field and possess a high degree of market knowledge and marketing expertise that the general public does not have. In that regard, we are just like other professionals that are "experts" in their field. I could do my own taxes, yet I pay a professional. People can sell their own homes, yet many choose to pay a professional real estate agent to do that for them. The choice is always theirs.
3. I spend a lot more time than 10-15 hours per client ~ on the selling side a broker tour alone is 4 hours of my time. From marketing activities to contract negotiations to transaction coordination to closing, many, many hours are spent on behalf of my clients. Sometimes big chunks of time and at other times simply a 10 minute phone call. All I can say is that both my buyers and sellers are very appreciative of the amount of time and energy I expend on their behalf.
4. All I can say is that I used to be a paralegal (for almost 10 years) and the attorney would charge, say, $2500 for estate planning documents that I prepared for him in about 30 minutes. So he spent about 2 hours with the client and paid me about $12 for that 1/2 hour of work. Is that worth $2,500? When you hire an attorney, you are not reimbursing him for what he spent in "paper money" to prepare that document. You are paying for his expertise.
While I can certainly respect that you have a different opinion, if you would like to try to stir up something or engage in debate, use your own blog or radio show to express it. Enough said.
Brett: You are certainly entitled to your opinions about the real estate industry ~ just don't hijack my blog to do it. It's not polite.
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You may not use my blog, my posts, my comments or anything I write in any way, shape or form.