Q: I had an agent knock on my door a couple of days ago. He told me he has a number of people interested in my property and asked if he could show them through. We are not really thinking of selling, although of course we would at the right price! I was happy to let him bring someone through but he tells me we have to sign a listing agreement first. Can’t he just show someone through and then we can sign if they want to buy it? Thanks, Jeremy B.
A: There are several things to consider here Jeremy. Firstly, you need to be sure that he is in fact a licensed real estate agent before you let him in the door! Secondly, he cannot legally show your home to prospective buyers without a signed listing/agency agreement – if he does, he has no right to claim commission if the purchase goes through. I should repeat that: If an agent introduces someone to your property without you signing an agency agreement, and that person buys your home, you do not have to pay commission to the agent.
So let’s say you confirm that the agent is licensed, and you go to sign a listing agreement: Firstly, there are two types of agreement, an exclusive agency and a general agency. An exclusive means that for the period of the agency (often 90 days) only that agent has the right to sell your property. A general agency means that you can sign an agreement with two or more agents, usually from different agencies or brands. It may sound like the best deal for you is a general agency, but in reality that seldom works to the vendor’s advantage (you can read more about this in our book “Sold!”).
Before you sign the agreement, the agent is required by law to provide you with a written price appraisal of your property (often a price range), and a written estimate of their commission. They must also provide you with a copy of the REAA Agency Agreement Approved Guide. And they must explain to you the length of the agency and when/how you may cancel it.
If an agent is just showing one or two potential buyers through you are quite entitled to sign an agreement for just one or two days.
In summary: If an agent wishes to bring a buyer through your home then you should ensure they provide you with an appraisal price, an estimate of their commission, and a listing agreement – for whatever term suits YOU.
And as always, before signing anything like this, please seek legal advice.