If you’ve recently taken your home off the market or your listing has expired and your realtor is asking to be reimbursed for expenses, you’re probably wondering what happens next and whether you’re responsible for costs incurred by the realtor. We have some tips for sellers whose homes aren’t selling as quickly as expected.
If you’ve ever sold a property, you know a lot happens before the home is ready to go on the market. Photos, videos, advertising, painting, and staging are just some of the upfront costs of selling a house.
A standard listing agreement is a legal contract that details how long the property will be listed, whether it’s listed exclusively or on MLS, and the remuneration for the realtor. Anything outside that agreement, like work done on the owner’s behalf, should be specifically spelled out to avoid problems if the home doesn’t sell or if the seller decides to take the house off the market for any reason.
How much does it cost to stage a home? The guys talk about their average staging costs here.
As with any contract, make sure any clauses are factual and specific. Generally, the realtor is responsible for marketing expenses such as photos, signage, and staging, but actual home improvements often fall on the homeowner’s list of responsibilities.
There’s always the chance that unforeseen circumstances will arise, so it’s best to be as detailed as possible. For example, if x occurs, then what happens next and when? Who is responsible, what are they responsible for, how much are they responsible for, and what if something else happens?
When a listing agreement is signed, the amount of staging costs will often be unknown. You could include a specific amount, which, if exceeded, becomes the homeowner’s responsibility.
What happens if my real estate listing agreement expires?
In the scenario where your agreement has expired, and your realtor is asking for reimbursement, although it wasn’t discussed at the onset of the relationship and there’s no documentation, you’re under no obligation to reimburse them.
Real estate teams who invest thousands of dollars and hundreds of hours into their listings often require six-month listing agreements, whereas shorter agreements usually come with real estate agents with less skin in the game, which often coincides with a lower interest in the successful sale. Either way, when you get to the end of the agreement, if the house hasn’t sold, and no mention of reimbursing the realtor was documented, you’re under no obligation to pay.
Do I have to pay my realtor for their costs if I cancel the agreement?
If the seller decides they want to break the contract before it expires, and the realtor has done their job and incurred considerable expenses, the seller should proactively offer to pay any costs the realtor has incurred. In all contracts, the party who’s in breach of contract, with few exceptions, is often liable.
It’s not only money but also time that a real estate agent puts into selling a home. Over several months, 100 to 150 billable hours are in the ballpark.
The answer to what happens if a house doesn’t sell has to start with the initial discussion; otherwise, it’s open to interpretation, which can lead to a lot of misunderstanding, and all parties must be reasonable and fair in the process. It is beneficial for both parties to have an agreement in advance.
Ask the questions and determine details about who pays for what while signing listing contracts. So, you know what you’re getting into financially and contractually; that way, you’re covered.