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Ruthless, Other/Just Looking in 60558

Length of listing contract?

Asked by Ruthless, 60558 Tue Aug 21, 2007

Paul's post re: DOM was so thought provoking I have to ask agent's and consumer's thoughts about the length of the listing. Consumers always seem to ask the norm for commission or if they can negotiate lower. But do they negotiate the listing period? I know agent's spend a lot of time and money on listings and need the opportunity to let it work, but stale listings are not good for business. If good service is the goal, isn't renewing a listing better than a longer initial time? If avg DOM includes under contract time and expired listings, then what would be wrong with a listing agreement that is 30-60 days shorter than the absorption rate? I can't wait to hear different thoughts.

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I do actually negotiate my listing length. I don't know about being shorter than absorption rate. I would be more inclined to be in-line with absoption rate. I always give my clients an out clause, and let them renew if they so desire. I was so sure of my market at one time, I told a client, if he priced is home at x and it did not go under contract in 3 weeks, I would reduce my commission. It went under contract in 2 1/2 weeks. What a rush! But seriously. If you know your market and you can get your clients to agree on your price, then there is no problem. I would not make that claim in todays market! But I do negotiate my contract length, ABSOLUTELY!
Web Reference: http://carriecrowell.com
1 vote Thank Flag Link Tue Aug 21, 2007
Good topic, Ruth. I take 6 month listings. I commit fully to the time, energy and expense necessary to sell the home. I actually think it would be a disincentive to put a shorter fuse on it. I could see agents hedging and possibly not committing full resources or effort into a listing that they know they might lose in 1-2 months if the home has not sold despite their best efforts. I could certainly see a shorter list period in cases where limited service brokerages are utilized because the marketing and opportunity costs are nil. Other than such an instance, reducing the listing period is largely counterproductive. Many sellers expect agents to work harder if the listing has a shorter guaranteed shelf life, but this is not so. Human nature dictates that a great many will pull back to minimize their potential loss if the home does not sell. By reducing the listing term, might a seller be inadvertently signing up for more limited service? Would an agent just start signing up as many 60-90 day listings as possible, and expecting the mls to sell a certain percentage with minimal expense or effort?

I have had sellers ask what incentive I have to sell the home within 30 days if they are obligated for 6 months? That's an easy one. I don't get paid until I sell the home! I want to feed my baby boys this month! I would rather a seller take a longer time with the vetting process than using the listing term to determine if I am a skilled agent. If, after plenty of due dilligence, they decide that I am their guy, than I commit to them and they to me. I am not a mass lister, and typically carry 4-8 listings at any one time. Committing the resources I do to the relatively few listings that I carry, I simply cannot risk them lapsing any sooner.

If I were to ever consider a shorter period, however, you can be certain that it would be tied to my list price.
2 votes Thank Flag Link Tue Aug 21, 2007
While the question seems simple, it is really quite complicated. If the seller is ready to be realistic about the market, a 60 day listing is probably may be enough. We don't have enough experience yet with the disappearance of the secondary market for lenders to understand its impact.

I tend to think of listing prices in terms of how quickly the seller wants to sell, and that will drive the price to some extent.

The online "experts" who haven't been in the market for years, suggest that sellers list for 30 days to see what the realtors "are made of." Okay, if the price is real. But if the seller is unrealistic (as is OFTEN the case), 30 days won't get it done.

The sayings in this part of the world are, you should be the second wife and the third listing agent, because by then, the other parties are realistic.
Web Reference: http://www.agdavi.com
1 vote Thank Flag Link Tue Aug 21, 2007
Ruth,
There are some Realtors that prefer shorter listing periods so they can Re-List your home and it will show up as a "new" listing. This practice is called "churning" and is frowned upon by the Dept. of Justice because it deceives the public as to the actual number of days the property has been available for sale.

My research shows that in the majority of cases, selling residential real estate in the first 30 days will generally net the seller the most money. Conversely, the longer a listing remains on the market, the less the seller will net. The problem is really one of expectations. Sellers hate to see their equity evaporate, and many Realtors have a difficult time helping sellers be realistic about the actual selling price.

Of course, this quote always helps: "prediction is difficult, particulary about the future".

Keith`
0 votes Thank Flag Link Fri Aug 24, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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I ask for 90 days on a low or median priced house, 120-180 on a higher end listing, commercial, or land.
I don't ask for long listings, because the renewal process is a built in trigger to review price and strategy.
I would adjust according to the market, the property and the client. My goal is to have completed sales, and long listings contributed little to that goal in my recent personal experience. I have had a few that were hunky dory after an extension or two. Usually land , those can take a long time.
0 votes Thank Flag Link Tue Aug 21, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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I also negotiate the length of the listing. If they insist on a higher price than I recommend, I insist on both a built in price reduction as well as a longer listing agreement.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Tue Aug 21, 2007
Cindi Hagley, Real Estate Pro in Pleasanton, CA
MVP'08
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