Ask an Agent: What Should Sellers Know Before Signing a Lease Agreement?
Realtor Sarah Spegel is very comfortable having a few hours of conversation with her seller clients about exactly what she’s planning to do to sell their home.
The agent for Re/Max Hallmark Realty says she’s very strategic and doesn’t just list properties at any time or at any price. If her client is unsure about anything they sign or have questions, she’s not afraid to answer them.
Since she prides herself on being so open with her clients and isn’t afraid to answer any questions they may have, we thought she’s the perfect agent to answer this week’s question:
What should the seller be aware of before they sign a listing agreement?
Firstly, know what you’re signing. I always advise my clients to read the contract, especially when there’s already a relationship between realtor and client, because sometimes sellers don’t even read the contract. They say, ‘Yeah, yeah, do your thing. We appreciate whatever you do.’ But it’s always good to read the contracts and know what you’re signing up for because I think when you ask someone who is selling their house, ‘What does a listing agreement mean?’ They would probably say, ‘Oh, it means you’re going to market my house and it says we’re going to list the house at this price and you’re going to do photos or whatever.’
But a contract is not super specific about what’s going to be done, it only describes the relationship. It says, I’m agreeing that this brokerage will have the authority to sell my property for this price starting at this date and ending at this date with this fee structure or commission – whatever it’s going to be – for whatever it is. The contract doesn’t really describe what the agreement is as far as service goes, so whenever I’m presenting it to a seller I always try to say, ‘Yes, this is the contract. However, this contract doesn’t really describe what I’m going to do for you, so before the contract is signed, here is a list of what it is that I do’. I do this with my sellers, but I do this with my buyers as well.
My advice is always read the contract, know what you’re signing and look at the dates on the contract. Let’s say the contract is for a whole year, what if you don’t have a great relationship following that meeting and after a month or two you want to move to another agent? Technically, you are in a contract for a year and it’s up to that brokerage if they want to release you, as the seller, from that contract. As a result, it’s very important that you know what the contract actually means in real life versus what it says on paper.
To go deeper, in my own list of services that I give my clients with each contract, I talk about whether staging is included and what level of staging is included. At times, I will even include the items that I will bring in because, when you stage a property, one property can be super bare bones and the other can be totally over the top. Not outlining exactly what an agent means by staging can cause confusion. There are a lot of ways agents could cut costs with a listing, so I always like to present the list of what’s included with me. In total, the list is 72 things that I can do. Sometimes I use it to justify the fees that I charge, but mostly it’s to show my clients exactly what they can expect from me.
As for the contract in general, I wouldn’t advise a seller to sign a listing contract for more than a couple of months. The reason is, if that relationship deteriorates for whatever reason, a seller should have the opportunity to move on. I don’t think contracts should be used to trap a seller into services. You have to have a minimum of a 60-day contract to be able to put a listing on MLS, but above and beyond that, contracts can be renewed and I don’t think signing a year long contract is in the seller’s best interest.