According to Lenchek, it all depends on the situation. While some homeowners sign the list contract at the first meeting, others may wait weeks or months before they are ready to sell their home. Anyway, a list contract will be signed as soon as you are ready for your realtor to start marketing your home. Open Listing: The Open Listing agreement offers the lowest level of commitment. Any real estate agent who brings you a buyer can get the commission AND you reserve the right to sell the property on your own (without paying commission) if you find your own buyer. Although the initial list price appears as a relatively simple term, it must be found after careful analysis. All real estate professionals who are worth hiring will voluntarily prepare a market benchmark (CMA) for you. A CMA provides you with a fair market value of your home. Home sellers would be wise to interview at least three local real estate agents and ask them each to provide a CMA. This way, you will be much more likely to get an accurate fair market value for your home. Exclusive agency list: In an exclusive agency list, the homeowner allows a real estate agent or broker to try to sell the house.

However, as with an open offer, you have the right to find a buyer on your own. If you find a buyer by yourself, the real estate agent would not receive a type of commission. The tail period should be as short as possible, z.B 30 days. Some real estate agents will agree to limit this queue to a number of designated potential buyers, or they will agree to waive this clause. They work in theory that they are professionals, and if they have not been able to conclude the agreement during their list agreement, but you are able to do it yourself, they will wish you good luck. Also, if you sell your home, you may be in the market to buy another one – and agents know that if they treat you well, you will most likely hire them as a buyer broker to find your next home or send them back to your friends and neighbors. The time to protect commissions, often referred to as “tails,” is often misunderstood. This clause states that the real estate agent is still entitled to a tax for a period after the expiry of the listing contract if you sell your home to someone who originally saw it during the duration of the listing contract. In order to avoid having to pay unnecessarily a commission, it is important that your realtor provide you with a written report on all the people who will see your home during the duration of the list agreement. Negotiate to add this report clause to your list agreement. Once this value is established, the initial list price and price strategy can be discussed and implemented. Don`t assume that your fair market value will be your original list price.

Depending on market activity and price changes, you can make your initial list price higher or even lower than the estimated fair market value. Some real estate professionals advocate an initial list price above your fair market value under the theory that you can always go down in price. Another school of thought is to start with a list price below the estimated fair market value and hope that several offers will provoke a bidding war that will ultimately result in a sale price equivalent to or greater than your estimated fair market value. List prices can always be adjusted upwards or downwards to reflect current market forces. Just because you can receive a full-price offer doesn`t mean you have to accept this offer. Note that in Virginia, if an agent produces a willing, ready and competent buyer, you can charge that agent a brokerage fee.