There are a number of considerations when you decide to put your house up for sale. You may decide to hire a real estate agent or do it yourself.
If you decide to hire a real estate agent the terms of the listing can vary and need to be carefully considered. If you decide to sell your house yourself you need to be aware that you will be signing a binding contract and seek any legal advice you need to ensure your interests are protected.
Whether selling privately or listing the property, it may help to have an appraisal of the property done. An appraisal indicates the current market value of the property. It assists in determining the listing price. Appraisals can be done by a real estate agent or by a private appraisal company. There may be a fee to have the appraisal done.
When using the services of a real estate agency, a seller will be asked to sign a listing agreement. A listing agreement is a legally binding contract between a seller and a real estate agency. It gives the agency authority to sell the property on certain conditions. The contract provides that the seller will pay a commission if an acceptable offer is made.
The listing agreement continues to be in effect until its term expires. During the term of the listing agreement, the seller will be bound by that agreement. A listing agreement has a maximum term of one year. A shorter term can be negotiated with the real estate agent.
If the property sells after the listing agreement has expired, generally the seller will not have to pay the real estate agent a commission unless the agency actually caused the sale, or the buyer was introduced to the property during the term of the listing agreement.
Because the listing agreement is a contract between the seller and an agent, it is important to understand it completely. Go over the listing agreement carefully with the agent before signing it. Sellers may wish to seek legal advice if they have any doubts or unanswered questions.
The commission is generally a percentage of the purchase price, and can be negotiated by the parties. The commission is paid to the real estate agency. Under the listing agreement, the seller must pay the commission when the house sells, even if the home sells for less than the listed price. If a seller sells the property privately while the listing is in effect, the commission may still have to be paid to the real estate agency. Also, if a seller refuses to accept an offer that meets the minimum price in the listing agreement, the commission may still be payable.
If you decide to list your house with a real estate agent you will need to decide what type of listing you want for your house.
This is the most common type of agreement. A multiple listing means the seller engages the services of one real estate agent, who then lists the property on the MLS® database that can be viewed by other members of the local real estate board and the Canadian Real Estate Association (Realtors®). The minimum listing period is 60 days.
Exclusive listings are not added to the MLS® database. This type of agreement gives only one agency the authority to sell the property and control who sees the property. The listing period can be shorter than the required MLS® minimum and can provide both the seller and the buyer with more privacy. In some cases it may be possible to also negotiate a lower commission for the listing agent.
Homeowners can sell their property without using the services of a real estate agent. While sellers may find standard agreements for sale online or elsewhere, it is important to remember that the contract between the seller and the buyer represents a legal commitment on the part of both parties. The terms and conditions in the contract bind both parties and can be difficult to change once both parties have signed. Sellers should seek legal advice before signing any documents, to ensure the documents accurately reflect their desires, protect their interests, and are legally sound.
PLEA can provide you with information to help you understand many legal matters you, a family member or friend may be facing.