Should I Hire a Selling Agent?
When selling your home, you have the choice of going “For Sale by Owner” (FSBO) or hiring an agent.
The principal advantage of selling your home yourself is that you save the cost of commission. However, there are a number of drawbacks. Your home will generally have less exposure to buyers. An agent also helps you in setting an appropriate list price, staging and decorating your home for showings and open houses. They negotiate with potential buyers and their agents. There is also somewhat of a stigma. There are buyers and agents who avoid homes for sale by owner, wary of the owners’ inexperience in the market resulting in FSBO homes generally selling for a lower price than their agency-listed counterparts.
Listing Agreement
If you decide to hire an agent, there are a few documents you will need to review and sign. One is the Listing Agreement. This is a legal document setting out an agreement between yourself, as the seller, and your real estate agent containing the terms of compensation, which is generally a commission on the selling price of 3-5%. The commission is usually split between the seller’s and buyer’s agent, as well as their respective agencies. Be aware of any “holdover” clauses where even if you sell your home after the Listing Agreement expires, you may still have to pay commission. Make sure you carefully read the Agreement to avoid unpleasant surprises.
Agreement of Purchase and Sale
This Agreement is commonly known as the “Offer”. It lets the seller know the buyer is interested in purchasing the property, sets out the buyer’s offer terms, and allows negotiations or a counter offer. The most common conditions are arranging for financing, completing a home inspection and the buyer selling their current home. A deposit is usually paid to show the buyer’s commitment to the purchase. This agreement will also detail what chattels and fixtures are included or excluded in the sale. Items such as appliances affixed to the property, light fixtures, window coverings, and mirrors.
Other Legal Documents
In addition to the documents, you might encounter some of the following in the selling process: seller statement, mortgage payout, deposit receipt, buyer’s cost sheet, purchase contract, loan application, property profile fact sheet, closing & settlement, exclusion list and seller’s statement of representation.
Costs
In addition to your realtor’s commission, there are other costs to bear in mind. You must ensure legal fees such as, property taxes and maintenance fees are up to date and paid. Any mortgage you might have will need to be discharged.
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