Last week we answered Diana’s question on why her home had not sold, and because we mentioned that it might be because she is using the wrong agent we thought we should tell you what is involved in a Sole Listing Agreement, and when and how you can cancel it. The real estate agent you choose to sell your house will ask you to sign an agency agreement.
This is a legally binding contract so make sure you read and understand it before signing. Your agent should also recommend that you take legal advice before signing.
Your agent must also give you a copy of the REAA Agency Agreement Guide which explains your rights under the agreement.
If you use any of the major Auckland real estate brands you will most likely be signing an agreement that contains just the approved standard clauses – if your agent modifies the agreement in any way then definitely seek legal advice before signing.
Your agent must explain to you when the agency agreement will end. Make sure you check the cancellation terms. These can vary from agency to agency.
A sole agency agreement gives one agent or agency the exclusive right to market and arrange the sale of your property. If you sign a sole agency agreement you should not sign another agency agreement with any
other agent until you have cancelled the first agreement. If you do, you may have to pay all agents a commission, regardless of which one arranged the sale.
If the sole agency agreement is for a residential property and for a term longer than 90 days, the client or the agent can cancel the agreement at any time after 90 days.
Make sure you check what happens when the sole agency agreement is cancelled. Some sole agency agreements become general agency agreements when cancelled – this means that you will also have to cancel the general agency agreement if you no longer want to work with the agency.
When a sole agency agreement is cancelled your agent must give you a list of people they have introduced.
If you sell to one of these people, the agent may be entitled to a commission.
If you change your mind after signing a sole agency agreement you can cancel it by 5.00pm on the first working day after you have been given a copy. This must be done in writing ie, letter, email or fax.
However, if an agent carries out any work before the agreement is cancelled and that work results in the sale of the property after the agreement is cancelled, the agency agreement will be legally binding and you will have to pay that agent commission.