Agency Agreements for Sale of Residential Property: What You Need to Know
When it comes to selling your residential property, an agency agreement is a crucial document to sign with a real estate agent. An agency agreement outlines the terms and conditions of the sale, and protects both the seller and the agent. Here`s what you need to know about agency agreements when selling your home.
What is an Agency Agreement?
An agency agreement is a legally binding document that outlines the terms and conditions of the relationship between the seller (you) and the real estate agent. The agreement specifies what the agent will do for you, how they will market your property, and how much commission they will receive.
Why Sign an Agency Agreement?
An agency agreement protects both the seller and the agent. For the seller, the agreement ensures that the agent will work to sell your property, and outlines the terms of their commission. For the agent, the agreement assures that they will be compensated for their work, and that they have the authority to act on behalf of the seller.
Types of Agency Agreements
There are three types of agency agreements: exclusive agency, sole agency, and open agency.
Exclusive Agency Agreement: With an exclusive agency agreement, only one agent is authorized to sell the property. If the seller finds a buyer on their own, they don`t owe the agent a commission.
Sole Agency Agreement: A sole agency agreement allows the seller to sell the property themselves, but if the agent finds a buyer, they are entitled to a commission.
Open Agency Agreement: An open agency agreement allows multiple agents to sell the property, and the seller only owes a commission to the agent who finds the buyer.
What Should Be Included in an Agency Agreement?
An agency agreement should include the following:
– The name of the agent and their agency
– The name of the seller
– The address of the property being sold
– The duration of the agreement
– The agent`s commission rate and how it will be paid
– The property`s asking price
– The agent`s responsibilities, such as marketing the property, arranging viewings, and negotiating with buyers
– Any additional fees, such as advertising costs
In Conclusion
An agency agreement is an essential document to sign when selling your residential property. It protects both the seller and the agent, and outlines the terms and conditions of the sale. By understanding the types of agency agreements and what should be included in them, you can ensure a smooth and successful sale of your property.