When you choose a real estate salesperson to sell your home, you will be required to sign a listing agreement – a contract in which you agree to allow the salesperson to sell your home during a given period and at a given commission rate. The agreement says that you will pay the Real Estate Professional a fee when you sell your home. Most real estate salespeople are independent contractors who work for a company operated by a licensed real estate agent. (A salesperson is licensed to sell real estate through an agent. An agent is licensed by law to sell real estate to others for a fee and employ salespeople and other brokers.)
The amount of compensation you pay an agent is negotiable, but the real estate salesperson will usually have to follow the company’s policy regarding compensation. The amount of the fee will be spelled out in the listing agreement. Make sure you understand how the fee will be paid before signing.
Most real estate salespeople will ask for an exclusive right-to-sell listing. This means that you will owe them a commission regardless of who finds a buyer during the listing period. In other words, if you decide to sell the house to your cousin, your broker still gets a commission. The advantage of this kind of arrangement is that the salesperson is motivated to work harder to sell your home.
It’s possible that a salesperson from another company will find a buyer for your home. In that case, your agent is the listing agent, and the second agent is the selling agent. In this case your listing agent will agree to pay the selling agent a fee from the amount you pay the listing agent.
It is important to clarify with your listing agent/salesperson that they are willing to “conjunct” as not all listing agents will agree to share their commission with another agent.
Length of listing
The listing agreement will specify how long you agree to list your house with a company. In New Zealand the standard period for a listing agreement is usually 90 days. You are entitled to opt for a shorter if you wish.
Remember that the listing agreement is a contract. You should get a copy for your records. Your Real Estate Professional is bound to the terms just as you are.
If you change your mind after signing an exclusive listing agreement you can cancel the agreement, in writing, by 5pm on the first working day after having received a copy of the agreement from the salesperson.