A Residential Listing Agreement is a standardized form that the Texas Real Estate Commission (TREC) provides, which a real estate agents will sign with a seller. However, the form doesn’t cover every potentially problematic situation. So, it’s extremely important you to include these three special provisions:
A “nightmare” scenario for any seller is a bad agent who has a great sales pitch. You find out only after signing the agreement that the bad agent is lazy, incompetent, dishonest, or any combination of these bad qualities. If you’ve signed an agreement without an "easy exit", the agent can force you to list with him/her through the entire term of the agreement. A good agent will continue to prove their value, so is very comfortable to include an easy out “cancel any time” provision in their listing agreement.
A typical listing agreement is for a 6% total commission. The listing agent earns 3% and the buyer’s agent earns 3%. What happens if the buyer doesn’t have an agent? Sometimes, an agent will represent both parties in order to earn the full 6%. Great for the agent, right? It’s also a huge conflict of interest. Because of this, it’s very important to add a clause that stipulates the agent can earn no more than the 3% seller’s representation commission.
You’re hiring a REALTOR to help you sell your home, but what if you sell your home? Sometimes, sellers get really lucky and a friend, neighbor, or family member wants to buy their home after they’ve signed a listing agreement. This good luck shouldn’t translate into an easy commission for the agent, which is why you should always include a provision that outlines exactly what will happen in this scenario.
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