I think I’ve found the right salesperson to sell my home, what’s the next step in the process?
That’s good news – Ideally, you have discussed your service expectations and looked your salesperson up using RECO’s free registrant directory on the RECO website to confirm that they are in good standing.
The next step is to sign a listing agreement with your salesperson’s brokerage. A listing agreement is a legal contract that usually obligates you to work exclusively with a brokerage while you’re selling your home. An agreement can encompass all activity associated with selling a property, including financial structure details (what you will pay the listing brokerage and, if applicable, the amount you will pay the buyer’s brokerage), or, it may be limited to specific services like advertising, and not include services such as hosting open houses or negotiating offers.
Before signing a listing contract or service agreement, you will want to thoroughly read and understand the document. Don’t be shy in asking your salesperson to explain it, line-by-line. It is a good idea to enlist the services of a real estate lawyer in the process so they can address any concerns you may have about the agreement.
If the agreement makes you a client of the brokerage, the brokerage is obliged to act in your best interests, sometimes referred to as a fiduciary duty. That means your salesperson, brokerage and its employees must follow your instructions, protect confidential information (e.g. the minimum price you will accept for your home) and protect your interests in the sale. As a client, you’re expected to be open and upfront with your salesperson so they can help you sell your home. If you enter a services agreement to sell your home, you should not expect the same relationship and may choose to share fewer details with your salesperson.
It is important to note, that should you find a buyer on your own while you have an active agreement, it is best to direct potential buyers to your representative since you will be contractually obligated to compensate your salesperson for their efforts.
The agreement must clearly specify the date it starts and the date it ends. If the agreement states a term longer than six months, you are legally required to authorize the term length by initialing next to the expiry date in addition to signing the document. Initialing the expiry date is intended to make certain you are aware and making an informed decision.
Most listing agreements also include a condition referred to as a holdover clause. That means that, for a certain length of time after the expiry of the listing agreement, you are obliged to pay your brokerage the agreed commission if you sell your home to a buyer who was introduced to or shown the property when the agreement was active.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.