Know Listing Choices When Selling Home
If you are thinking of selling your home, now is the best time of the year because buyer demand is at its traditional annual peak and sales prices are the highest.
Although mortgage interest rates have risen recently and buyer demand is beginning to soften, home prices have not yet been hurt in most areas of Southern California.
For starters, interview at least three local real estate agents about selling your home. Even if you are considering selling your house yourself, talking with agents will show you all the work that is involved in a home sale.
After you select the best agent, go through the house carefully with the agent to point out its advantages as well as any defects. Some states, such as California, require written disclosure statements so buyers will be aware of any unfavorable conditions of the residence.
Lois Clinton, spokeswoman for the National Assn. of Realtors, reports their most recent survey showed 76% of home sellers hire a professional realty agent to market their house. Clinton says the realtors’ survey shows that 20% of homes are sold without an agent. About 4% are bought by corporate relocation companies.
Although not every agent will accept each type of listing, here are listing choices to consider:
Open listing: An open listing is really not a listing. Instead, it is an invitation to one or more realty agents to find a buyer for the property. The agent who obtains an acceptable purchase offer receives the entire sales commission.
But no sales fee is payable if the seller finds a buyer without the help of an agent or if the seller withdraws the property from the market.
Many realty agents refuse to work on open listings because they lack control over the property. However, some agents will try selling open listings, especially if the potential sales commission is large, on rainy days when there is nothing else to do. But open listings are primarily used for commercial properties where the owner is reluctant to list with one agent.
Exclusive agency listings: When a home seller believes he might be able to find a buyer for the house without the help of an agent, but he doesn’t want to miss out on prospective buyers produced by realty agents, the exclusive agency listing is appropriate.
If an agent is hired under an exclusive agency listing, the seller owes a sales commission when the agent or a cooperating agent produces an acceptable buyer. However, no sales fee is owed if the seller finds a buyer without the agent’s help.
For this reason, some realty agents refuse to accept exclusive agency listings.
Exclusive right to sell listings: The exclusive right to sell listing is by far the most popular because it gives the listing agent maximum control. Whether the agent, a cooperation agent or the seller finds a buyer, the listing agent receives a sales commission. Because this type of listing gives the agent the maximum incentive to spend time and money to market the home, most agents prefer this listing type.
Net listing: A dangerous variety of the exclusive right to sell listing is the net listing. In some states, this listing type is illegal because of the potential for abuse. When the home seller specifies a net sales price, such as $100,000, to earn a sales fee the agent must locate a buyer who will pay more than the $100,000 net price.
However, if a buyer wants to pay just the net price, the agent is obligated to present the offer to the seller although the agent will earn nothing. An unscrupulous agent might be tempted to forget to tell the seller about such an offer.
Another net listing problem can occur if the agent obtains a higher offer, such as $120,000. Then the seller might refuse to accept the offer because the agent failed to tell the seller the true value of the property or he may feel the agent is being too highly compensated.
A better alternative is for the seller to list the property at its full market value, knowing the net amount the seller will realize after paying the agent’s commission.
Multiple listing: Although not a separate type of listing, the multiple listing is an exclusive agency or exclusive right to sell listing that is submitted by the listing agent to the local multiple listing service, which distributes a photo and details about the home to all member agents.
The result is to give the widest possible local exposure to the home, so it will bring the highest sales price attainable because virtually all local realty agents and their buyers are aware of the property’s availability.
