You Don’t Have to Sign--Realty Listing Contract Is Open to Negotiation
Imagine this scenario. You’ve carefully selected an agent to sell your house. He hands you a form granting him an exclusive, six-month right to sell the place--no cancellation allowed. You panic at the terms yet sign anyway, figuring the standard contract is unbendable. Right or wrong? Wrong.
“Although most agents--representing their brokers--will come up with a standard listing contract, you don’t have to go with that contract,” advises Beauty Stephens, who sells homes through the Century 21 chain.
If your house languishes on the market unsold or your relationship with the agent sours, you could come to want a shorter contract or one that lets you out easily. And the law gives you every right to seek such a contract.
Indeed, virtually every aspect of the listing agreement is open to negotiation--including the time it stays in force and how fast you can declare it null and void.
Granted, many realty companies strongly favor in-house forms or those passed out by local realty boards. Such forms are drafted in cautious legalese and have the blessing of a company’s lawyers.
Nevertheless, as William Echols, a vice president of the realty chain RE-MAX of California, observed: “Even the standard forms leave blanks--giving you latitude as to what’s filled in.” Besides commissions, Echols says, flexible items often include the duration of a contract and the terms for its cancellation.
“You should have the right to fire the broker or agent if you’re not satisfied,” says Patricia Collins, who sells homes through Long & Foster, a mid-Atlantic chain. The company routinely grants sellers the right to cancel a listing with 24 hours’ notice if they’re unhappy with the agent.
“You have to realize that selling a house is one of the most emotionally stressful times in peoples’ lives,” Collins says. “Nobody should be trying to sell a house when they’re unhappy.”
A clash in personalities can provide one good reason for canceling a listing contract, according to Collins. “Maybe the agent is too laid-back for you or too intense.” You may have thought you had chosen the agent carefully yet the differences in style didn’t surface during the original, honeymoon period when the agent was seeking to sell you his services.
Some sellers--especially first-time sellers--need a lot of hand-holding. They thrive on constant, daily updates from their agents. At the other extreme are introverts who feel bothered by an agent who calls with any but the most significant news. If either type is wrongly paired with an agent, the relationship can soon break down.
An agent’s response time can also become an issue. “Some sellers find their agents inaccessible, and that’s bad,” says Stephens, of Century 21. For any good reason, an agent should be readily reachable--whether during business hours, evenings or weekends. A seller’s message should be returned the same day--if not by the agent, then someone assigned to cover for him.
“My body clock has been tuned to stay up late,” says Stephens, who often finds herself on the phone until midnight with clients who have long commutes and keep late schedules. When she’s not in, she uses an answering machine to take messages, though “a lot of people are turned off by them,” she allows.
Besides finding an agent accessible, a seller has the right to expect the agent will actively market his property. When the listing is first put out, this often involves a “brokers’ open,” a festive preview to which other realty people are invited. It may also involve public open houses, neighborhood flyers and other promotional techniques.
Active marketing should, in all cases, involve advertising as well as prompt and thorough follow-up between the listing agent and others who have taken potential buyers through the property. If these things aren’t being done--and the agent offers no plausible explanation--then the seller may have good cause for cancellation.
To be sure, some sellers cancel listing contracts for the wrong reasons. It’s a naive seller who blames the realty agent for his failure to quickly unload a home in a slower-than-average market.
“Sometimes sellers are unrealistic in their expectations,” says Connie Callow, sales manager of Town & Country Properties in Ft. Washington, Md., a Washington suburb. A Ft. Washington seller with a $170,000 home for sale can expect to wait 90 and 120 days, according to Callow. She says the same property would have sold in less than 60 days in the spring of 1988, a peppier market.
An unrealistic seller who cancels his listing agreement impulsively may be acting to his own disadvantage. Fair play suggests you give a competent realty agent time to do the job properly.
“Compare it to a car going across the desert--you’ve got to have enough gas to get to the other side,” says Collins, the Long & Foster sales manager. Unless you’ve changed your mind about selling, it would be silly to cancel your listing agreement right before an announced open house or on the eve of an advertising blitz. Not only would your last-minute cancellation waste your agent’s money (these marketing tools can be costly) but it might cause confusion about your property in the public’s mind.
It would also be unfair to fire your agent because, after you insisted on pricing your property higher than the market, it sat unsold for a lengthy period. The best agent in the world is unlikely to move an overpriced property.
Be suspicious of an opportunistic agent who attempts to lure you away from your listing agreement before it expires. Known in the industry as “going behind a for-sale sign,” the practice is unethical yet increasingly common, according to Callow, the Town & Country realtor.
Although--for continuity’s sake--it’s better not to change agents at any point in your contract, it’s wise to give yourself that option, should you need to use it.
Several major U.S realty chains routinely offer 24-hour cancellation clauses and others let you cancel with 10 days’ notice. RE-MAX agents, who are basically self-employed while working within the context of a broker’s office, may be especially flexible in negotiating terms. Yet, in all cases, remember that negotiation is a real possibility.
One footnote. If you reach the end of your listing contract with an unsold house, don’t assume it’s an absolute certainty that your agent will renew. An occasional seller is so irritating or demanding that the agent wants to drop him.
