Sometimes, It's the Agent Who Wants to Break Up

Q In a recent column about listing agreements, you wrote that you never advise sellers to sign an agreement longer than 90 days. This poses a problem for me.

As a real estate agent who sells in an area with average days on market of 151, it would not be financially prudent for me to spend all the time and money marketing a listing that most likely won't sell because the average days on market is a lot longer than a 90-day listing agreement.

Even if I'm being reasonable, many times the reason the house won't sell is interference by the sellers or their determination not to follow my suggestions for getting the property into shape or to lower the listing price. I see it every day.

By the way, sometimes we want to get rid of the seller but are stuck because of the longer listing contract we've signed.

A: I know that many agents would like to dump their unrealistic sellers. The problem is one of expectations. Sellers expect that their property will sell immediately, for a high price. But in most parts of the country, the market is so slow that it will take a lot longer than sellers would like to get a contract.

So sellers become disappointed and blame their agents. Agents get frustrated because the market is changing, in some cases minute by minute, and their sellers aren't realistic.

In some cases, sellers feel as if their real estate agents abandon them once they sign the listing agreement. Many sellers, if they know that a listing agent is doing all that he or she can for them, will hang on to a great agent and renew a listing agreement several times.

If a listing agreement would allow sellers to cancel at any time and for any reason after the first 90 days, with 30 days' notice, that listing time would give sellers the comfort of knowing that they can get out of a bad arrangement while encouraging them to stick with their current agent to get the property sold.

Signing a 365-day listing (as is the practice in some areas) isn't prudent for sellers, especially if the agent isn't one of the good ones.

I'm sure that if you look around your office, you'll see that 20 percent of the agents do 80 percent of the work. Assuming you're a good agent, if you have a seller who is smart enough to sign on with you, you should be fine with this type of arrangement.

I agree that it is costly to list, show and advertise a home, but that's the way real estate agents are compensated. Someday, listing agents might be paid for their out-of-pocket expenses if a home doesn't sell, but for now the listing broker gets paid an average commission of 5 to 6 percent to list and sell a home.

There has always been a tradeoff in the residential real estate industry between the cost of marketing a home and the commission for the sale. Some sales will go quickly, and you'll reap a larger reward, while others will go slowly.