All real estate listing agreements must be in writing. This is true for traditional brokers as well as flat fee listing companies. No property may be listed on the MLS without a valid listing agreement; the listing agreement is essentially an authorization in writing from the seller which is then signed by the broker. Listing agreements of any type should spell out the duties and responsibilities of each party. Unfortunately some traditional, full service listing agreements do spell out what the owner must do such as provide access to the property and pay a commission, but do not spell out exactly what the broker must provide such as weekly advertising in a particular newspaper, a certain type of sign, or an enhanced listing on Realtor.com. Many listing agreements tend to be vague, such as stating that they real estate agent will market the property without saying what exactly that means.
Many local Realtor associations or multiple listing services promulgate a standard listing agreement. There are typically only a few blanks and a couple of blank lines in which to modify the agreement. This ends up causing most listing agreements to be similar, even though different agents do business in different ways. Some agents may promise open houses every weekend, glossy magazine advertising, meeting prospects at the property and other things that end up not getting done or being handed to an unqualified assistant.
Realizing that some of their competitors are promising things and not delivering, some savvy agents have drawn up addendums that spell out their service more precisely. If more agents did this, sellers would know upfront what to expect rather than being disappointed in the future. Flat fee listing brokers tend to have a much more customized listing agreement that spells out in much greater detail what exactly is being provided by the broker. The listing agreement should ideally list exactly what ala carte services are opted for. Often an MLS listing will be included in a basic program, but there might be additional services like extra photos or phone forwarding available as optional upgrades.
While the entire agreement is important and it is advisable to ask any legal questions to your attorney, just a few of the things to focus on in you review of the agreement include the following. Make sure your name, price, property address and/or legal description, and contact information are accurate. This could prevent misunderstandings or delays in communication. Review the commission section. This is critical since you are typically obligated to pay a fee to a buyer’s broker in the event that they bring a buyer to your property. The listing agreement is a legally enforceable contract so do not take your commitment to pay the commission lightly. There may be penalties or other issues if you do not honor this commitment. The disclosures section will require you to disclose what you know about the property, ranging from known defects, to the presence of lead-based paint, to the location of earthquake fault zones (and everything in between). When in doubt, always disclose, disclose, disclose.