In Part I you learned what a listing contract is, and which contract is best for both parties. Now we get to the good stuff; the price and commission.

A listing agreement should express the sales price that a seller and the agent have decided on. Understand that your agent is a professional and wants you to get the most money possible from the sale of your home. Ask them to provide comparable sales properties to prove what the market value is. From there, you will need to fill out a seller’s disclosure, stating all known issues of the home. Once you decide on a price, it’s time to talk commission.

A real estate agent should inform you of the commission they make from the sale of your home. Most agents will make 6-7% of the sales price, which will be paid by the seller. Most brokers will also have a minimum commission, for example if their minimum is $2,000 and you’re trying to sell a $20,000 home, you will still pay $2,000 instead of $1,200 or $1,400.

While a 6 or 7% commission may sound like a lot, the listing agent actually has to split that commission with a buyer’s agent. Now that they’re down to 3-3.5%, they also have to pay broker’s commissions, broker’s fees and your home’s marketing expenses. If you own a million dollar home, you may be able to negotiate the percentage down or even find a number you are both comfortable with.

Make sure you understand exactly how much your agent is charging for commission, and that there are no misunderstandings. An agent should be completely open and willing to answer your questions during a listing agreement meeting, since they are hoping to earn your business. The Denver real estate agents at PorchLight understand how to meet their clients of needs and welcome all questions and comments.

One thing to keep in mind with a listing agreement is that it’s a right to sell for your agent. If your agent finds you a buyer, you can’t just wait out the agreement then sell it without paying a commission.

It’s important to keep in mind that a listing agreement is a contract. If there are terms in the contract you don’t feel comfortable with, everything is negotiable. While it’s best to remain fair to your agent, understand that they’re trying to earn your business and many of them will be willing to work with you on different terms. Understanding the listing agreement is one of the most important pieces in selling your home.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit www.porchlightgroup.com.

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