90-Day Listing Keeps Agent’s Attention on Work

Planning to sell your house? Then chances are your realty agent will try to lock you into a six-month listing agreement. Think seriously before you sign it, some realty specialists advise.

“Sign that and you’re a captive for a whole six months--even if the agent does a bad job marketing your home,” cautioned Carolyn Janik, author of “How to Sell Your Home in the ‘90s,” a Penguin paperback.

Three months is long enough for a seller to evaluate an agent’s performance, Janik said. If the property hasn’t sold in that time and you’re convinced the agent is performing well, you can always extend on a month-to-month basis, she said.

Remember, a listing agreement is a legally binding contract. Most agreements keep you from backing out and relisting with another realty firm during the term. Typically, you’re also blocked from selling the property on your own until the contract expires.

“Give the agent three months and you keep the pressure on them to keep performing for you. Why commit to six months if you can get three and know you can extend if the person is doing a good job for you?” Janik asked.

Like an employee who is motivated by frequent performance evaluations from the boss, the realty agent with a relatively short contract or the need to get a contract renewed on a monthly basis may be sparked to try harder, Janik is convinced.

On the other hand, she said, a seller who has signed a straight six-month contract has few levers of control over the agent’s behavior.

Of course, all agents want to sell houses. Usually, agents make no commission until a home moves--no matter how much of their own cash they’ve spent to advertise the property.

In reality, however, there are wide variations in the resources agents expend on their listings. You want an agent who will not only spend enough on ads but also actively promote your home’s sale through open houses and other techniques.

“You don’t want to be stuck in a long-term contract with an agent who isn’t performing,” Janik said.

Regrettably, some agents lose interest in a listing after a few months--especially if they have had few expressions of interest in the place, said Norman D. Flynn, a past president of the National Assn. of Realtors.

“Listings can go stale on people after a period of time,” he observed.

Still, realty experts caution against cutting the agent’s term to less than three months. An agent working under a one- or two-month contract will hesitate to invest much time or money on a property, fearing the agreement will expire before the home is sold and the commission can be collected.

“Give the agent an honest break. As an absolute minimum, if you want good exposure for your property, you want a 90-day agreement,” Flynn said.

One to two months may be enough time in a hot sellers’ market, he says, but these days, buyers’ markets are the rule in most communities, and it can take 90 days or longer to sell a home.

For the seller who wants the best possible listing agreement, realty specialists offer these pointers:

--Realize that terms of the listing agreement are negotiable.

Don’t be talked into signing a long-term contract because your agent says his standard contract form can’t be altered. Real estate offices have their own policies, but it’s rare for local laws or regulations to affect the term of a contract between home seller and agent.

In fact, even standardized listing agreement forms often have blanks to be filled in for the term of the contract and other features. A smart seller is aware of this and will seek to negotiate details of a contract rather than letting the agent dictate them, says Janik, the author.

These days--with more homes on the market than there are buyers--your power to negotiate is hardly absolute. Insist on too short a contract, for instance, and an agent may refuse your business. Where buyers are scarce, agents have been known to decline listings they consider too much of a gamble.

Still, most agents should be willing to make a reasonable adjustment in the term of their standard contract--especially if your home isn’t priced too high to sell. If you don’t like one company’s attitude, you can always look elsewhere.

--Consider asking for a cancellation clause in your listing agreement.

A good cancellation clause lets you escape from the agreement--no strings attached. An agent confident of his ability to perform isn’t intimidated by the addition of such a clause to his contract--indeed some realty chains promote them, noted Peter G. Miller, author of the HarperCollins book “Inside the Real Estate Deal.”

Probably you won’t need to escape from your contract. But if your agent isn’t doing as much as he could to show your property to prospective buyers, introduce it to other agents or advertise the place as promised, the cancellation clause could come in handy.

“There are several million listings a year in this country, and it follows that not all of them are going to work out successfully. A good cancellation clause is nothing more than peace-of-mind insurance,” Miller said.

Distributed by Universal Press Syndicate .