Home Selling in Scarsdale>Question Details

Susie, Home Buyer in 80528

Negotiating the listing agreement

Asked by Susie, 80528 Thu Dec 23, 2010

I can see that most listing agreements are very similar. In talking to my lawyer she recommended that I request some changes to the wording. How flexible are usually the different brokerages in acommodating changes or allowing an addendum to the contract?

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BEST ANSWER
Hi Susie, our answers were crossing one another - now that I see the extent of the changes, they are quite significant. I must say that I have not seen a listing agreement negotiated to this point in my tenure as an agent, but that does not mean it doesn't happen.

Given the extent of your proposed changes, I would recommend that you talk with the agents you have identified on your short list and get a sense of their receptiveness. I like the idea of having measureables and an out if the agent doesn't perform but the agent does need time to do her job. Likely part of what you have been presented is the market absorption rate for your area - ie, time to sell expressed in months on average. If that number is under 3 months, then that may be enough time, but otherwiise it may not align with the market reality.

What is terrible is being locked into an agreement with an agent that is not performing - the old "list and disappear" nightmare. My recommendation is to pick the very best agent, agree on deliverables and then measure success in delivering on those promises, and then listen to your very good agent and let her do her job.

And as to Dual Agency, this is at the broker level, so if you go with a large firm especially, this could limit your exposure. Whether it is your agent that brings the buyer, or another in her office or any office under the same broker, Dual Agency applies. So if it is a concern about representation, then I'd suggest insisiting on another agent being brought in if it is your agent that brings the buyer. But do consider the downside of excluding Dual Agency.

On this point and all others, review them one by one with your agent and go from there.


Good luck to you!
Jeanne Feenick
Unwavering Commitment to Service
0 votes Thank Flag Link Fri Dec 24, 2010
Hi Susie,

You make some very good points about your revision requests to a listing contract. I can understand why you want to have some of the language altered, but keep in mind that selecting and working with an agent to sell your home is going to require a team effort. If the contract that you want with a listing agent is geared to be mostly one sided in your favor and you decide that you want to call all of the shots, then why not just go at it yourself. It appears that you already have a real estate attorney on your side to advise you with the entire process, so why do you need a real estate agent?

I would recommend that you take more time in selecting the right agent, listen to what they advise, check references on their past performance and leave all of the other changes and revisions on the sidelines. Please keep in mind that most listing agents do a great deal of work upfront before ever seeing a dime. There are not many professions out there that you don't get paid up front before the job is started or at least some reimbursement part way through. We as agents not only spend a great deal of time marketing your home, but to then to have a seller pull the rug out from underneath our feet. It's just not right.

Find a good agent, be respectful of them and their requests and you shouldn't have any problems. Remember it's a team effort!

Best of luck!
Web Reference: http://www.jameswehner.com
1 vote Thank Flag Link Tue Dec 28, 2010
Susie,

The language your lawyer has written is fair. The one caveat would be advertising. Should you have a high end home that may be advertised in the Robb Report on real estate or some other national magazine the lead time for such an ad can be quite a while. It wouldn't be fair to the agent if they spent their own money to promote your home in such a way only to have you cancel the listing. In some instances print advertising is still valid. You may want to add additional terminology to deal with such a case. Then again, if your agent is doing this much for you, odds are you won't want to cancel your agreement.

As far as an agent's performance, you could spell out clearly in writing exactly what you expect and when. This could include advertising, open houses, photography and even how often you want to be contacted and your preferred method of contact such as phone or email. This shouldn't be a burden on an agent and should actually be helpful. If the agent thinks it's too much then you both know right up front and you can move on to another agent.

Don
Web Reference: http://www.nyhomeseller.com
1 vote Thank Flag Link Fri Dec 24, 2010
I don't know about listing agreements in other states, but the one we use in Florida was created by a party of both Real Estate Attorneys and Realtors. It has been written to protect both the broker and the person listing the home! To have an attorney suggest that you add addendum to this agreement is okay as long as both you and the broker can come to agreed terms. More so please ask the lawyer making the advice and see if they are actually Real Estate Attorneys, if not then even though they seem to be helping, they may only be hurting. Please remember that there is a reason you practice law, it is open for mistake through bad interpretation. Only Attorneys that specialize in Real Estate are stable enough in the field to recommend changes!
1 vote Thank Flag Link Fri Dec 24, 2010
Susie,

I would have no problem with the specific changes you would want to make in the listing contract. Some of them I cross right out in the contract as a general course of business ie the rental paragraph. I've done all of them at one time or the other with one exception, dual agency.

If you agree to dual agency in effect the company that lists your home becomes a dual agent representing both the buyer and seller. Your agent should always remain your agent representing you and therefore is your designated agent in a dual agency situation. This way they have a fiduciary responsibility to represent you at all times. Nothing you tell that agent regarding your personal situation or anything to do with the sale of your home may be disclosed without your authorization in advance. To forbid a dual agency situation basically tells anyone in your Realtor's firm that they can't ever represent a buyer when it comes to your house. As most agents are representing buyers you are kind of shooting yourself in the foot and removing the motivation for agents within your listing agents firm from showing you home. Perhaps this wasn't clearly explained to you.

I wanted to say I like your idea of providing a list of services provided and when they will be performed. It's amazing how many agents list your home in the MLS and forget about it figuring someone else will just sell it.

If you haven't decided on an agent at this time or would like to speak to another agent, please don't hesitate to get in touch.


Good luck.

Donald A Mituzas 845-222-0114
Licensed Associate Broker
Certified International Property Specialist
2008 Realtor of the Year
Director - Westchester Putnam Association of Realtors
Director- New York State Association of Realtors
Web Reference: http://www.nyhomeseller.com
1 vote Thank Flag Link Fri Dec 24, 2010
Hi again Susie,

I’m not sure what part of Trulia you entered this question that you are getting all this answers from California but rest assured that I have a team of lenders and attorneys that work with me and my clients to make the process as smooth as possible.
The listing agreement, or the “Exclusive right to sell” agreement, is a state form so it is similar in all New York counties. There is a section that allows for changes. In most it’s paragraph 14 called “additional points”. This paragraph allows the seller and agent/broker to make concessions.
Again, call or e-mail me if you would like to talk about these issues.

Walt FitzPatrick
Keller Williams Realty Group Scarsdale
914-513-9811
walt@waltfitzpatrick.com
1 vote Thank Flag Link Thu Dec 23, 2010
Hello Susie:

I won't practice law, if your lawyer doesn't practice real estate.

No really, in real estate everything is negotiable, however it is more about supply and demand.

What specific changes are you looking for in a listing agreement?

Thanks,

Johnny Yankoviak
1 vote Thank Flag Link Thu Dec 23, 2010
Dear Susie,

Of course there is some flexibilty in accomodating changes and adding an addendum to a listing agreement contract depending if two of the parties agree.

Please feel free to contact me with any further questions you may have on this topic at 914-582-2904.

Thank you,

Lisa Loeb
www,GrandLuxRealty.com
914-582-2904
0 votes Thank Flag Link Thu Jul 12, 2012
It totally depends. The listing agreement is with the broker. Independent brokers and franchises may be more flexible than a corporate brokerage. Also, many of the agreements are standardized by a board or MLS so they may not be the malleable. Your, best bet is to discuss the changes with prospective brokers and see who can offer the most mutually beneficial agreement.
0 votes Thank Flag Link Fri Jan 7, 2011
I would give it a try if it is at the recommendation of your attorney! If the company wants to do business with you they will make the necessary changes. In our office we use a real estate board created and approved contract that is created to be fair to all parties. However if we have a client that wants to change our "boiler plate" contract we usually agree provided the request is reasonable. For more real estate answers check out: http://www.rochesterhomelocator.com
0 votes Thank Flag Link Thu Dec 30, 2010
To make changes on the standard agreement will necessitate having the brokerage engage the service of their lawyer and/or the association lawyers to determine if the changes are work-able. Is your lawyer attuned to real estate law and practices of your state?

Note that all states have their own Realtor Association that have teams of lawyers who have put together the agreements and other real estate documents that are used by realtors in their state. These lawyers make sure these agreements adhere to or conform with the laws of their state.

Depending on what kinds of changes your lawyer recommends, and how they are presented in and addendum, be prepared for a delay in response while the brokerage discusses such changes with their own lawyer.
0 votes Thank Flag Link Wed Dec 29, 2010
Susie,
You nerver know till you try.Everything in Real Estate is negotiable. Sit down with an agent and go through it point by point. I dont see any deal killers it is pretty straight forward stuff, a listing agreement. Throwing out a laundry list of questions in this forum is bound to bring out a lot of conflicting opinions. Personally this could be fodder for your agent interviews...
0 votes Thank Flag Link Tue Dec 28, 2010
Laura,

Are you saying in Maine the commission is not negotible?

Walt FitzPatrick
Keller Williams Realty Group Scarsdale
914-513-9811
walt@waltfitzpatrick.com
0 votes Thank Flag Link Tue Dec 28, 2010
In the state of Maine, the Maine Real Estate Commission has a standard form that realtors use. Is there a section for "Other Conditions" that is where I add any changes. Depending on who your agent is, will depend on how flexible they and their agency are. If you are asking for a change in the commission, think twice, you get what you pay for.
Best wishes for the new year!
0 votes Thank Flag Link Tue Dec 28, 2010
Susie,
Any contract with the listing agency can have an addendum attached to it that makes changes to the agreement as long as both sides (seller and listing agency) agree on the terms.

All the best,
Gary Geer

http://www.GaryGeer.com
0 votes Thank Flag Link Mon Dec 27, 2010
Most listings agreements are standard language approved by teh Board of realtors that most agents pay to belong to. Some things may be changed while other i would never accept being changed. You can always certainly try, but be sure to explain why you are making your changes and what your concerns are and save the legal fees.
0 votes Thank Flag Link Fri Dec 24, 2010
Lynn, sorry re. confusion. I used to be a buyer. Now I am a seller. In fact, in theory one can be a buyer and a seller at the same time...
0 votes Thank Flag Link Fri Dec 24, 2010
CONFUSED: Are you a home buyer? If yes WHY would listing agreement between property owner & listing agent have anything to do with you?

Are you a seller HOWEVER marked your ID as a home buyer? If yes then forms are state regulated can not change the wording UNLESS there is an addendum attached. for those changes only

Are you a home buyer asking a question about sales offer agreement? If yes then forms are state regulated can not change the wording UNLESS there is an addendum attached for those changes only

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Fri Dec 24, 2010
Hi, I haven't had many clients change language in the listing agreement but there is a section for modifications. It should be a mutual agreement so just address each concern or change with your agent and that should work, or not. Brokerages tend to have their own policies even though the forms are standard so this will depend on who you use.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Fri Dec 24, 2010
Hi one more time! :-)

I have read the posts on this question and your other one and the answers seem to be spilling over into both forums. As someone mentioned, this can be a daunting process if you are not immersed in it every day! For us full time, hardworking and ethical agents, it’s quite simple. As I mentioned in an earlier post; if your home is on MLS, any serious buyer will see it.
The large companies that you asked about and their related advertizing dollars, is SOMEWHAT of an “old school” argument. With very few exceptions, any brokerage listings will end up on Trulia and Realtor.com. If a buyer is working with a buyer agent, they will see the listing on MLS while searching within their client’s price range and other specifications. (This is why a hard working, knowledgeable agent who knows the market and area and advises you on a proper price, is the most import thing these days!)
It’s not rocket science but it IS science! 
OK all, this is one of the very few days that I reserve to spend entirely with my family and I am going to do that now. Susie, please feel free to e-mail me directly if you would like to discuss this in person at your convenience. I will explain EVERYTHING and answer all your questions with no pressure or obligation. Take care everyone!

Walt FitzPatrick
Keller Williams Realty Group Scarsdale
914-513-9811
walt@waltfitzpatrick.com
0 votes Thank Flag Link Fri Dec 24, 2010
First off, Susie, I do mean to congratulate you for looking out for yourself.

Every contract represents an agreement, and to my mind, editing the listing contract is just a negotiation - you (through your attorney) want concessions, your listing broker might want some of their own.

The way I read it, your attorney wants you to be able to back out of a sale and not be liable for a commission, for you to be able to use your broker's marketing to attract a buyer and pay half of the commission, wants you to be able to walk at will from the listing agreement without recourse, and then there's the services bit which is somewhat ambiguous. And in return, you're offering . . . the opportunity to market your property through the listing term without compensation, which is what we normally do.

Anyway. Since I'm not really familiar with the listing contract used in your parts, there are a couple of generalities that I would object to, even if I really wanted to take on the task of marketing your home.

#1. We brokers expect to get paid - at least here in Seattle - for delivering a full price and terms offer to you. Should you reject that offer, we expect to get paid. If you agree on an other than full price and terms offer, and you default on the contract, we expect to get paid.

#3, we don't have a clause like that in our listing agreement, but I'm not sure why I'd want to limit my avenue of recourse necessarily. #4 is funny; some companies will let you walk at will, others won't. I still may insist on having my expenses comped, however.

#5 is interesting, what constitutes a "service?"

#6 is outrageous, and I wouldn't agree to it. Big surprise, a buyer drives by the property and a seller comes out and says, I can save you half the commission! There is a type of listing for that, it is called the "open" listing. Not only that, but our MLS would not accept that clause - cooperating brokers do not want to show properties where the seller may have a buyer in their back pocket (we do have a "prospect exclusion" clause in case you actually already have a buyer in mind, but that's another story.)

#7, at least in Washington State, is just stupid - it's essentially saying, I don't want any of the agents in the listing office to bring me a buyer that they represent. I am fine with my not being a dual agent, but I'm not fine with cutting off a segment of the market.

In closing. You are to be commended, and I wouldn't do it.

All the best,
0 votes Thank Flag Link Fri Dec 24, 2010
Thanks, that's a good observation. What would be some sample language that you would find acceptable "that provides stipulations as to the agent’s performance". How do you qualify/quantify the agent's perfomance?

Anyone can say that they did "everything they could" and the issues are with the price, the market, etc. Despite all of these, as many stated, there agents who assume that someone else might sell their listing and they can just wait and then show up at closing... How do you protect yourself (as a seller) from something like that happening? Unfortunately an interview, checking references or statistics do not provide the needed reassurances.
0 votes Thank Flag Link Fri Dec 24, 2010
Hi again,

Personally, I would find this acceptable (in principle) but it would have to be agreed upon by the principle broker at my (or any) office. I would look for some language that provides stipulations as to the agent’s performance. As written, this would allow a seller to cancel for no reason. I would hate to have an agreement canceled under this rider and find out that the sellers cousin or brother-in-law, picked up the listing or some similar thing! :-)

Walt FitzPatrick
Keller Williams Realty Group Scarsdale
914-513-9811
walt@waltfitzpatrick.com
0 votes Thank Flag Link Fri Dec 24, 2010
Thanks to the very helpful clarifications re. dual agency. What I really want is "dual agency with designated agents", to ensure that my listing agent represents only me. How well the "Chinese wall" works (or doesn't) in the confines of the same agency, that's another topic, but one cannot have everything....

Would any of you, based on your experience, have "appropriate wording" for the termination paragraph to ensure that if I sign a contract for 6 months and the agent doesn't perform I can get out of it without a penalty? I hope that it never happens, but I read enough to know that like in every specialty you have exceptional professionals and bad apples.

Suggested by real estate lawyer:
"Buyer or Broker may terminate this contract upon submission of written 48 hour notice, in which event this agreement is invalid except for the Owner’s obligation to pay the agreed upon commission if within 1 month of termination the Owner signs a sales contract during this period and then closes on a property for which the Agent or a Cooperating Broker introduced the buyer during the period of this listing Agreement. Commission is due at closing. Owner(s) will not, however, be obligated to pay such commission if Owner(s) enters into a valid Exclusive Listing Agreement with another New York State licensed real estate broker after the expiration of this Agreement.".

Any comments? Would you find this a fair, acceptable statement?

Happy Holidays to all of you!
0 votes Thank Flag Link Fri Dec 24, 2010
You can always request changes to a contract. It will be up to the agent you are dealing with and since everything is negotiable, so is a contract.

Happy Holidays to you and your family.

Warm wishes,

MaryAnn Dempsey, Realtor, C.D.P.E.
mdempsey@kw.com
0 votes Thank Flag Link Fri Dec 24, 2010
Hi Susie,

I agree with Jeanne. The dual agency clause actually has two facets. One is ACTUAL dual agency where one agent is representing both the buyer and the seller. (This is actually a concept that isn't really possible. An agent can't provide absolute loyalty to both the buyer and seller. It is possible to have a listing AND bring the buyer but the buyer must be informed that the listing agent works for the seller and that he/she can present offers to the sellers but they shouldn’t talk to the agent about their negotiating strategy as the agent would be bound by agency law to tell the sellers anything they hear.)
The other scenario is dual agency with designated agents. (Agents work for the same company but are designated to each represent the buyer and seller. The COMPANY is the one in Dual Agency.) As Jeanne mentioned, if you are dealing with a larger company with many agents, this is a common situation and I don’t think you’d do well to take yourself out of that game.
Based on your questions and contractual requests, it sounds like you, or someone you know, may have been burned in the past. Yes there are plenty of agents that consider their job finished once they get your listing! I am not one of those agents, nor is any agent that finds themselves in the top 2% of their field these days! I take my fiduciary responsibility to my clients VERY seriously. The only time I would ever turn down a listing is if the seller is completely unrealistic about their home’s value. That doesn’t happen very often in my world though. (Well….I DO often have to show homeowners the recent sales comparables to get them in the right ball park! If you do that correctly and effectively, they usually see the light!)
I have had only one client ask to modify Exclusive Right to Sell to the extent that you are and I made it happen as I knew, that it wouldn’t be an issue. 
Happy Holidays to all,

Walt FitzPatrick
Keller Williams Realty Group Scarsdale
914-513-9811
walt@waltfitzpatrick.com
0 votes Thank Flag Link Fri Dec 24, 2010
Susie, the hour is the time to make a presentation for your home, I am sure an hour of your time to protect your investment is neither an abuse of my time nor yours.... call our office anytime. best, Jon
0 votes Thank Flag Link Fri Dec 24, 2010
Jonathan, while I appreciate the offer, I would not want to abuse your time (and I also would not have an hour) for your comments regarding the points that would cause a broker to not wish to take my listing. As you said, an agreement is a two way street and as a result by no means would I want to deal with an agency that doesn't want me as a customer and doesn't have my interests at heart (through a fair contract that protects me too, not only the agency). If you care to explain what's so terrible about what the real estate agent recommended to change, you might want to shortly address it on the forum so that others can learn from it too. Thanks, regardless.
0 votes Thank Flag Link Fri Dec 24, 2010
Hi Susie,

I could spend an hour explaining the answer, feel free to call me 914-723-5555... some of the points are not an issue at all, some of the points would cause a broker to not wish to take your listing. Believe it or not our firm turns down more listings than we accept.

However understanding why a broker would take that position is important to you. As I mentioned in another post, we would be happy to discuss this and you do owe it to protect your investment to spend a little time with Engel & Voelkers. I look forward to meeting you when an only if you wish..... best, Jon
0 votes Thank Flag Link Fri Dec 24, 2010
Generally I find that the agreements are not negotiated, but there is some language in there that I suspect is among what your attorney might flag....I don't have paperwork in front of me, but I believe there is language that speaks to the brokerage being due commission in cases other than a closed sale. in practice I've not seen this play out, so I would agree that the language should agree with the practice.

What we do know is that you are interviewing several brokerages/offices/agents and they all desire your business - that is all good. So be sure the commitment they make align with your goals and that you are comfortable with the agreements.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Dec 24, 2010
Thank you for your time and answers. The real estate lawyer wants to make sure that my best interests are also protected. Some samples of recommended changes (for a good reason) that she made:
1. Ensure that the contract clearly spelles out that the commission is due only upon successful closing. The contract now states: “Owner(s) understands and agrees to pay the commission referred to in paragraph 3, if (a) the property is sold or transferred, or (b) is the subject of a written contract of sale…”. This paragraph assumes payment of commission even if the property was not closed.
2. Removed the paragraph regarding an exclusive agreement for rental. This doesn’t belong in the sales agreement. If I would ever want to rent, I can sign a contract for that with whoever I might want to pick at that time.
3. Ensure that my obligations upon termination of the contract are not completely “open ended”. The contract now states: “Owner(s) understands that if Owner(s) terminates the Agent's authority prior to the expiration of its term, Agent shall retain its contract rights (including but not limited to recovery of its commission, advertising expenses and/or any other damages) incurred by reason of an early termination of this agreement.”. The lawyer removed the “not limited to” and “any other damages”.
4. Have a way out of the contract with no penalties if the agent doesn’t perform (particularly if the term is more than 3 months).
5. Include the list of provided services with their frequency, as applicable
6. I want to pay half of the commission to the listing agent if I bring the buyer.
7. No dual agency.
The agents I talked to told me that all of the above is common practice. If that’s the case (and they are honest professionals) they should not have a problem enforcing it via the contract that I have to sign and is legally binding.

I am curious: which of the above changes you would have a major issue with and why.
0 votes Thank Flag Link Fri Dec 24, 2010
Dear Susie,
The agreement is not a state form as stated below by someone but it is a binding legal contract.

Agents are not allowed to make changes only the Broker can perhaps make changes if they are not being asked to break any existing state regulations.

If you need any help, please feel free to contact our office and we can give you the telephone number for various legal hotlines. However agents and brokers are not allowed to offer advice outside of their expertise. Best wishes this holiday season.
914-723-5555
0 votes Thank Flag Link Fri Dec 24, 2010
As long as I get the listing and my company gets paid on a closing we're flexible with the rest.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Fri Dec 24, 2010
Hello Susie, I cannot speak for your area, but in CA most brokerages will be okay with adding an addendum to the listing contract. Providing the addendum makes sense. Does your lawyer specialize in Real Estate? If not, I would get a second opinion.

Good luck!

Ryan Smith
0 votes Thank Flag Link Thu Dec 23, 2010
Susie,
None of us who have answered so far practice in NY and neither do I, so your best answer will likely come from a local who does business there. My thoughts on the subject are that it really depends on what type of changes you are making and how flexible the specific agent/brokerage is.
Personally I've added addendum to my listing agreements regarding very specific issues which pertained to a given property or client. Big changes can present problems and need to be reviewed by the agent’s broker or attorney which add cost and complexity.
My suggestion is to discuss with your attorney how important the changes you want really are, discuss your issues with the best agent you can find and hear them out if they say no or want to adjust it. Best of luck.
0 votes Thank Flag Link Thu Dec 23, 2010
Hi Susie,
Our contracts have passed rigorous inspection by lawyers who specialize in Real Estate Law. I suppose you could suggest it, but I doubt seriously you would have any brokers willing to make changes in a standard listing agreement.
0 votes Thank Flag Link Thu Dec 23, 2010
Johnny "Culdesac" Yankoviak won't lead you to a dead end, Susie.

For me, the answer would be, no. Getting houses sold nowadays is difficult enough, but if you want to add on to my burden the need to have my own brokerage having an attorney review on your attorney's addendum, plus convincing the MLS that the addendum doesn't invalidate the listing . . . may-be.
0 votes Thank Flag Link Thu Dec 23, 2010
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