Listing Contract

Listing contracts vary considerably from place to place. However, most realtors use established listing agreement forms that are industry standard in their area or are dictated by their brokerage company. Everything on these preprinted forms is negotiable.

Here are some basic terms to consider:

1. Length/Term of the Agreement. A longer agreement benefits the agent because it allows him or her more time to find a buyer for your home. In a weak market like in 2006 and 2007, that's okay.  A term of six months is normal becuase homes are on the market for over six months sometimes.  But if Michigan homes are selling quickly, you don't want to be committed to one agent for more than a few months. If the home doesn't sell within the initial period and you're satisfied with the agent's efforts, you can offer to extend the term of the agreement before it expires.

2. Amount of deposit.  If the deposit is not returned to the buyer because of defaulting on the contract.  The listing agreement states how much the real estate agent earns of it.

3.  Commission. Although commissions are negotiable, most areas have a standard percentage that agents expect to receive. This amount usually is 6 percent of the sales price, but you will find agents who accept 5 percent and agents who ask for 7 percent. Whether you want to pay the percentage that's typical in your area or negotiate a lower rate is up to you. A lower commission will save you money. A higher commission will give the agent more incentive to invest in marketing your home. It costs money to advertise.  If you want a low commission the agent is not going to spend a large portion to advertise your home.   You have to spend money to get money.  Buyers agents find out how much commission is offered on your home through the MLS. If you offer too little of a commision your home may not be shown.  Why show your house when the agent can make $5000 showing the house down the street.  Be careful not to cut off your nose despite your face..

4.  If you refuse a full price offer and there are no conditions or contingencies.  The listing agreement normally states that you owe the commission.  So if you are not serious about selling your house don't list.  You could be sued by the buyer to sell the house if you sign the purchase agreement or you could owe the commssion.  It could be an expensive lesson to "try out the market"
 
5. MLS. A listing agreement typically authorizes your agent to post your home in the Multiple Listing Service (MLS). Unless you're selling a very exclusive property or have serious personal privacy concerns, the MLS is a no-brainer because it helps the agent market your home to the widest possible group of potential buyers. Today, most MLS databases are accessible by consumers on the Internet. The public does not have access to commission information on the listings.

6. Length of time an agent is protected.  You can't turn down an offer, then terminate the agent & listing and then try to go behind the agents back to sell the house to the buyer.  You will owe the commission.  If a buyer has gone through the house and put an offer in.  Take the offer if you like it.  You most likely will end up in court and lose the commission, attorneys fees, and court costs.  It will cost you a lost more.  There are underhanded people that have tried it.

7. Lockbox. A lockbox is a tiny key-holding safe that can be inconspicuously attached to the front of your property. Any agent who has the means of accessing the lockbox (e.g., the key or combination) can retrieve the keys to your home, unlock your door and show your home to prospective buyers even when neither you nor your agent is present. If you're concerned about strangers entering your home alone, don't authorize a lockbox. If your home is vacant, located in a low-crime area or if you've removed your valuables and are willing to take the risk, a lockbox might be reasonable. The more people who see the property, the better chance you'll have of selling it for a favorable price.

A listing contract is good for both the real estate agent and the seller.  It puts down what the seller would like to list the house for, the commision to be paid, the length of the contract, and the way it is to be shown.  When you list your Michigan home for sale you want a signed listing contract.  Whether you have an Oakland county home, a Wayne county home, a Washtenaw county home, a Livingston county home you want the terms in black and white on paper so there are no disagreements.