Selling your home is a big move. Doing it alone is scary and overwhelming. Listing it with a realtor gives you the support and knowledge you need. Agents help sell homes faster and for higher prices. It sounds perfect. But how long does the contract last and what happens when it expires?
The Listing Contract
You might feel overwhelmed signing the listing contract. Knowing you are on the hook to sell with one person for the next six to twelve months is scary. Do your research. Don’t sign with just any realtor, no matter how good his reputation.
Do the research yourself. What’s the average turnaround time? How often does the realtor show homes? How well does his/her bidding go? How many homeowners got close to the amount they wanted for the home?
What do others say about the realtor? Are there a lot of bad reviews? Find out why. They may not have anything to do with what you need. If they do, you may want to steer clear.
When you do sign, know that you can’t use anyone else during the contract’s binding period. Each realtor has different terms. Don’t be afraid to negotiate them. If you only want to sign a contract for six months, express that. If a realtor doesn’t agree, find another one.
Just know that legally you can’t list your home with anyone else during the contracted period. You also can’t sell the home privately. The realtor is privy to the commission earned from selling the home during the contracted period.
The Expired Contract
Now, what if the realtor can’t sell the home within the contracted period? The contract expires. Now what?
You have options. You can sign another contract, but before you do, figure out why the home didn’t sell. Is there a problem with your home or the realtor? If it’s your home, signing with the same realtor isn’t a bad idea unless, of course, he didn’t give you advice on how to fix the home to make it marketable. Your agent should be your advisor, letting you know along the way things you can fix and do to sell the home.
If the realtor failed to hold up his end of the bargain, though, consider a different realtor. Did he or she market your home? Did he or she negotiate appropriately on your behalf? Were there mistakes on the realtor’s behalf that caused you a sale?
If the realtor caused issues, go ahead and find another one. Once the contract expires, you can make your own choices. Find a new realtor, sell the home on your own, or pull the home off the market – it’s up to you.
There’s one exception. If the home is under contract when the realtor contract expires, you must stay with the same realtor. You can’t pull the listing and keep the commission for yourself. The realtor did the work – he earned his commission.
The Withdrawn Listing
You always have the option to withdraw your listing too. A withdrawn listing means you no longer advertise it on the MLS. Your realtor contract still exists, though. Withdrawing your listing should mean keeping the home.
You can’t list with another agent or sell the home privately. You breach the contract if you do and the realtor still has rights to the commission. The same expiration date for the contract still exists. Once the contract expires, you are free to make changes as you desire. Until then, the contract remains in place.
Real Estate Contracts Don’t Automatically Renew
There’s no such thing as an automatically renewing contract. Even verbal agreements don’t stick. Once expired, you must make a choice. You can sign another contract if you loved the realtor and just didn’t sell the home. You can also make other arrangements if you want to move on. Don’t assume that your contract automatically renews though.
Real estate contracts seem scary, but they help you sell your home in a legally responsible way. Both parties have protection when you sign a contract with a realtor. Make sure you review your contract with your real estate attorney before signing to make sure it suits your needs.Click to See the Latest Mortgage Rates»