Real Estate Agents; Not Magicians, Part 1

“How long a listing agreement should I sign” is a question I see often. It’s a great question but has no cast in concrete answer.

There are variables that go into the length of the agreement:

1)      Most important:  what are the market conditions? If your agent runs the Multiple Listing statistics and it shows the average days on market (DOM) for a similar home/in a similar price range/in areas where a buyer would be looking at homes to be ____(fill in the number of average DOM), this gives you a base starting point.  Add to that number a time frame to get inspections/attorney approvals done and close.  I usually use 45-60 days for these events. Your listing agreement should not be less time than this.

2)      What terms have you defined?  a) Are you pricing it where the agent suggests? b) Is your home in showing condition (de-cluttered; de-personalized; staged to show; clean)? c) Is it on a keybox and accessible on short notice (agent and buyers are in car at the curb)?

Answering no to any of these will add varying (but huge) amounts of marketing time.  You need to do your job for the agent to do his/hers in a timely manner.

I see agents respond to these questions with statements like “never sign for longer than 60 days”; why would anyone sign for 6 month/one year.”  Then, I look up their statistics and recognize that their statements are a (ahem) slight exaggerations.  Remember, some people will tell you what you want to hear or what appears to benefit them.

Mostly, I take my listing agreements for one year and have not had any seller, in over 30 years, complain or cancel because they thought I was not doing my job or thought they could get an agent who would do better. Whoa, how can I say this? When I do my interview with the seller, I make sure to cover pricing, staging, marketing, and communication.  My sellers get a checklist of everything I said I would do so they can follow along if they would like. They get in-depth market reports on the 1^st and 15^th of the month, with daily updates as things happen, and, sometimes, just a call to say hi and see how they are doing

Please remember that real estate agents are typically commission only.  Their brokerage house may pay for some of the cost of doing business but they have additional out of pocket costs…even if your home does not sell.  And, the time they spend on you is worth dollars because it is time they are not working with another seller or a buyer.  Tell me…where else can you involve someone with one of your biggest financial assets, have him spend money and time, and not pay him unless you reach your goal?

Tags: Chicago metro, Chicago suburbs, Listing Agreements, Northwest suburbs, Real Estate, Selling your home