What your agent has given you is a typical listing agreement form. While it may be preprinted or pre-filled in with the amount of the commission, the length of the listing agreement, and who pays for the closing costs (or other costs like document preparation fees), the entire agreement is generally negotiable.
So, if you don’t want to list the property for a full year, you can change that to six months or three months. You can make the agreement renewable or cancelable upon written notice, or on 30 days’ notice. You can change the amount of the commission, exclude dual agency and cross out the closing cost paragraph. But before you do, you might want to know what the custom is in your area relating to these matters. If the seller usually pays these costs, your request to have the buyer pay them may be way out of market norms. And if you request a reduction in the commission to something that is out of the norm, the listing broker may just not want the listing.
But before you make any changes, you should invite two other top local real estate agents in to give you a comparative marketing analysis (CMA). In the CMA, they’ll tour your parents’ home, look up homes that are comparable that have recently sold and provide you with a suggested list price. You can then compare their listing agreements with the one your agent gave you and decide who you want to use, and under what terms.
Some of what the agent is asking for is locally driven. If everyone in the area gets 5 or 6 percent commission, that’s what she’ll put in the agreement. If you want her to market the property to agents in her firm (dual agency), then you can decide if that’s worth a full commission or if there should be a discount. And if sellers typically pay closing costs in your area but you don’t want to pay all closing costs, then you should put down “to be negotiated with the buyer.”
It sounds to us as though you should ask the Realtor some of these questions to figure out whether the standard form is the way you want to go or if there’s flexibility from the boilerplate. And getting some other agents in the door will give you helpful information and some perspective.
Finally, it’s a seller’s market in most of the country. You should ask the agent how long she really thinks it will take to sell your parent’s home and why. If she has suggestions on what would make their home sell more quickly and for more money (a question you should ask other agents as well, if you haven’t already), you should pay close attention. She should tell you about the average list days on the market and how long it is taking, on average, to close on property. You should discuss commission rates and make sure you’re comfortable with what she’s telling you.
Having an open dialogue with your agent will go a long way toward making this a satisfying experience for you and your parents. Good luck.
Ilyce Glink is the creator of an 18-part webinar+ebook series called “The Intentional Investor: How to Be Wildly Successful in Real Estate” as well as the author of many books on real estate. She also hosts the “Real Estate Minute” on her YouTube channel. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them at ThinkGlink.com.