A real estate contract is a written agreement between the consumer and the real estate agent that formalizes the relationship of both parties in the transaction. Once signed by the consumer, it will authorize the agent to represent the buyer in the home purchase; or to list and advertise the seller’s house. For buyers, it is often referred to as “Buyer agency agreement” while for the sellers, it is called a “Listing agreement.” The document will explain the consumer’s rights and options; also, the agent’s responsibilities and compensation process.
Real Estate Contract Inclusions
There are differences in the details and the terms that should be included between the buyer agency agreement and the listing agreement. But generally, a contract should explain the following information:
- The real estate agent’s responsibilities – Under the buyer agency agreement, the buyer agent owes fiduciary duties to the buyers. It is a legal term that means the buyer agent is legally required to put consumer’s interest ahead of his own interest. The buyer agent is obliged to represent the buyer only. On the other hand, the main responsibilities of a listing agent include listing the property in a multiple listing service (MLS), marketing and advertising the property, accepting offers on behalf of the seller and representing the best interests of the seller.
- Agent’s commission and fees – This is one of the most important details in a real estate contract. This will explain the agent’s fees for the services rendered. The fees can either be a flat fee (fixed amount of money) or commission based (percentage of the property’s final sale price). But the fees and commissions are always negotiable.
- Contract duration – A real estate contract should state the duration of the agreement. The common time period is typically from six to nine months, but it can be shorter or longer depending on the consumer’s preferences. Also, a well-written agreement will give the consumers a right to unilaterally terminate the contract for any dissatisfaction with the agent. An agent protection clause will also be in a good agreement. This will preserve the right for the agent to get a commission for properties actually shown by the agent for a certain period of time after contract termination. Since most agents work on straight commission, this protects their time and effort.
The host of the Barry and Larry real estate radio program that airs on Saturdays in Colorado suggests that 100 days is the ideal maximum length of a real estate contract. He believes that signing contracts for more than 100 days holds consumers captive when there may be substandard performance. A limited contract time of 100 days is a reasonable amount of time for buyers. For sellers, 60 days or less is adequate in most normal to seller markets.. All terms and conditions in a real estate contract are negotiable, including commission fees and length of a contract.
The hour long radio show that aired recently on KHOW630 am station in Denver may be heard here:
Every Real Estate Contract Should Address these 3 things:
- Consumer Protection – Once a consumer signs either a buyer agency agreement or a listing agreement, the real estate agents are obliged to perform fiduciary duties for them. This means they can expect a higher level of service from the agents since both parties’ relationship and responsibilities are formalized in writing. Seller agents are required to get the best possible price for the seller, while buyer agents are required to serve and prioritize the buyer’s best interests.
- Consumer Representation – Buying or selling a home takes a great deal of energy and focus. Consumers who pick a good agent as a partner in the process will save a lot of time and experience less stress because their agent will be tasked with many responsibilities as stated in a real estate contract. Also, the agent will have access to an extensive database of properties– the MLS or multiple listing service. Their job is to look for the best deals for buyers. If a seller’s agent, their job is to excel against other agents to expertly advertise to attract multiple buyers.
- Value for the money – Signing a real estate contract will help ensure consumers get value out of the buyer’s agent or seller’s agent sides of the commission that is built into the sales price of properties.. Agents should provide a level of expertise that ideally makes every step of the process smooth and easy. They can also assist with recommendations of good lenders, home insurance resources, good home inspectors, and other real estate transaction-related services.
Finding the best real estate agent
The initial work for consumers is to find the best well-matched real estate agent to work with.
Skyfor’s Buyer Agent Search program is a trusted best agent finder program for over 20 years. It is a free consultation service to all real estate buyers and sellers. It specializes in suggestions of top-performing real estate agents who have been scrutinized and evaluated over many years for consistently top performance. The service is led by Kathleen Chiras, who answers real estate-related questions and provides interview questions for selection of buyer or seller agents. The service typically recommends two or three agents to interview for a certain area. The 10-item list of interview questions empowers consumers be in charge of the process and to pick the right agent for them.
The Buyer Agent Search program provides a selection of real estate agents who have already been vetted for experience, reputation, top reviews, and great consumer feedback. “We have fields in our databases to check the service percentage of agents, company philosophy, education & designations. These are all presented to the consumer”, Chiras added. The service always does their own interview of agents before referring them to consumers. The program also empowers consumers to pick the best agent that will work for them by having staff available to answer questions and follow up with the agents to make sure they are taking good care of their clients. This will help consumers avoid getting hooked up with the wrong agents.
The Buyer Agent Search service has a wide network of top agents located in all 50 states, and in most cities of the United States. Go to this page in the Buyer Agent Search site to start shopping for top agents. Their headquarters office is staffed 7 days a week and available to call anytime to discuss the best strategies for the selection of top realtors.