Now Comes the Paperwork
After you’ve met with several agents, reviewed their CMAs, and checked their references, you should have a pretty good idea of which REALTOR® you’d like to use. He or She will ask you to sign an Exclusive Listing Agreement (or something similarly named), which is the contract outlining the details of the agreement between you and your Realtor® giving them the right to list your home for sale.
At minimum, the Listing Agreement will specify:
- The initial list, or “asking” price for your home
- The term of the contract (how long you’re committed to the agent)
- The compensation (commission) you agree to pay the real estate agent(s)
- Whether or not you agree to “dual agency” (described below)
Real estate agents are paid on a commission basis which means they don’t get paid unless they sell your home. The seller pays the commission which is a small percentage of the sale price and ranges regionally. The commission is split between the listing and buyer agents’ offices. A side note, real estate agents generally receive only a portion of their company’s half of the commission, and a good agent will earn every penny!
The Listing Agreement will outline a host of other legal considerations as well which your REALTOR® should be able to explain in general terms. If you have difficulty understanding the contract, it’s best to have an attorney review it for you.
Another form you will be asked to sign is some type of Agency Disclosure. This document defines the legal relationship between you and your real estate agent. It outlines the legal responsibilities an agent has to you, as the seller.
Sometimes, your listing agent will have their own buyer for your property. This contractual arrangement is called Dual Agency. If this situation arises, have your agent explain it to you in detail, and make sure you fully understand the terms before signing. If you agree to dual agency, your REALTOR®’s legal responsibilities to you are reduced and they may not be able to continue giving you the kind of advice you need to make informed decisions.
Certain forms and disclosures are required by the Federal government, and are the same for all states. Others are state-specific and can be found at https://www.nar.realtor/forms/forms-for-realtors.
Your REALTOR® is not being a “stickler” by having you sign these various documents. He or she is protecting both, you and their agency within the law. If you are not asked to sign these forms, then your agent has missed a few steps, and it’s possible their lack of attention to detail may be detrimental to you going forward.
Once the first round of paperwork is complete, it will be time to get your home ready for sale. Your REALTOR® will likely make recommendations on decluttering, repairs, cleaning, and staging. Hopefully, all this work will result in a Contract to Purchase, or an “offer” on your home. An offer outlines a buyer’s proposed terms for the purchase. Again, these contracts vary by region.
Your REALTOR® will help you negotiate any and all offers you receive on your property. The real paperwork will begin upon your acceptance of an offer; real estate transactions are notoriously paper dependent! If you don’t already have a real estate attorney, your agent can likely recommend one, and a good attorney will explain the various documents you’ll be asked to sign.
With an “accepted offer” and deposit in hand, you’ll be one step closer to being in your new home, wherever that may be.
The contents of this article are intended to convey general information only and not to provide legal advice or opinions. Contact an attorney for specific legal advice.