When selling your home, you often feel like you have a million “to-do” items on your plate. So many preparations, so little time! The cleaning and decluttering tasks can seem endless. Plus, you have all the minor renovations and updates that can make your home more appealing and hopefully add to your final selling price. Beyond the sale, you have the moving logistics to consider. Often, this means searching for a new house of your own as your listing hits the market. It’s no wonder selling your home can feel like a massive undertaking!

During this process, one thing that’s probably not on your mind is the paperwork. However, this too, deserves some of your attention. Real estate contracts are legally binding, and it’s critical to understand them before making a commitment. The first document you’ll encounter is likely a listing agreement. What does this mean, and what should you know before signing anything?

What Is a Listing Agreement?

Simply defined, a listing agreement is the contract between you, the seller and the real estate brokerage you enlist to help sell your home. There are two types of listing agreements that all sellers should be aware of.

1. Exclusive: An exclusive listing agreement means only the brokerage you are signing with has the right to find a buyer for your home for a specific amount of time. The benefit of this arrangement is increased privacy when selling, and it can also mean you will get a higher level of service from your Realtor®. Once the exclusive period ends, other agents may gain access to show your home.
2. Open Listing: Your home will be listed on the MLS®, and other agents may show your home to prospective buyers. A non-exclusive listing can provide more exposure for your home. 

The legal details are an essential part of a seamless and successful transaction. Here are a few other resources to help you stay on course:

• Selling a Home for Someone Else? Here’s What You Need to Know
• How Canada’s Newest Legislation Impacts Sellers
• What Real Estate Lawyers Do

The Terms of a Listing Agreement

The Ontario Real Estate Association provides real estate agents with standard forms for real estate transactions. A listing agreement protects both parties and should clearly outline the terms of your contract. Clauses covered include:

• The commission the brokerage will receive upon closing the sale, which will be split with the buyer’s agent
• The expiry date of the contract
• The holdover period where the brokerage can receive a commission after the listing agreement expires (usually 90 days)
• Whether your listing will be advertised on the MLS®
• Permission for your real estate agent to market and show your property
• Any finder’s fees or referral fees the brokerage may receive from a third party, such as a mortgage broker or bank

Since the document is binding, you should never feel rushed or pressured and should only sign when you are confident that you understand the terms. A real estate agent who has the patience to sit down with you and happily explain the details of the listing agreement is likely someone you can count on to negotiate for your best interests. 

What Happens if You Terminate a Listing Agreement?

Can you legally terminate a listing agreement in Ontario? It depends on the contract and on your reasons for cancelling. This is one more reason to read through the terms carefully. The agreement may have a clause that allows you to back out if you can provide evidence that the agent has not lived up to their promises. However, keep in mind that a cancellation fee may apply. 

Alternatively, you could ask to be assigned to a different real estate agent within the company. This request has a higher chance of being granted since your contract is with the brokerage rather than the individual agent.

What happens if you change your mind about selling your home at all? Life can change suddenly, and your goals may no longer align. For example, an illness or a job loss may mean moving is no longer feasible. In that case, an honest conversation with your real estate agent is in order. If you back out of a listing agreement, you may be required to compensate the brokerage depending on how far along you are in the transaction.

Your best course of action is to examine your goals and resources and be sure you know what you want before you sign a binding agreement. A reputable real estate agent will be happy to take the time to answer all of your questions so that you feel confident moving forward. 

Are you ready to make the most of your transaction? Here are some tips to help make your home stand out:

• The Power of Staging When Selling Your Home
• How To Negotiate A Real Estate Contract
• Minor Upgrades, Maximum Results

Why Working With the Right Agent is Essential

Your Realtor® has a fiduciary duty to represent you throughout your transaction. What does this mean? By law, they must always work on behalf of your best interests above all else. That said, not all real estate agents are equal. What should you look for when considering someone to represent you? Here are just a few things to consider:

• How long has the agent worked in your area? 
• Do they have a track record of success even during challenging times, or have they only worked during the seller’s market of the last few years?
• What level of service can you expect? For example, does the brokerage provide staging services or are you expected to handle that on your own?
• What resources does the brokerage offer to provide maximum exposure to qualified buyers? Ideally, your agent will make extensive use of both online and offline advertising methods.

As you begin your research, you’ll notice that some agents have more experience and greater attention to the small details that make your transaction a success. Most importantly, you should look for a professional who is committed to providing the highest level of client service. Taking the time to find the right agent is well worth the effort as it means you are more likely to enjoy a positive experience when selling your home.

At Woolcott Real Estate, we are passionate about your satisfaction and success when selling your home and we’ll work relentlessly to prove it. Do you have questions about our process? Reach out to us right here or call 905-332-9223 for more information.