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The Wisdom Of Limiting A Broker's Listing Agreement

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By ILYCE GLINK Tribune Media Services

The Tampa Tribune

Published: August 7, 2008

In a recent column about listing agreements, you wrote that you never advise sellers to sign a listing agreement longer than 90 days. This poses a problem for me.

As a real estate agent who sells in an area where homes average 151 days on the market, it would not be financially prudent for me to spend all the time and money marketing a listing that most likely won't sell within 90 days. Many times, the reason the house won't sell is interference by the sellers or their unwillingness to follow suggestions for getting the property into selling shape or to lower the listing price. I see it every day.

By the way, sometimes we want to get rid of the seller but are stuck because of the longer listing contract we've signed.

I know that many agents would like to dump their unrealistic sellers. The problem is one of expectation. Sellers expect that their property will sell immediately for a high price. But in most parts of the country, the market is so slow that it will take a lot longer than sellers would like. So sellers get disappointed and blame their agents. Agents get frustrated because the market is changing, in some cases on a minute-by-minute basis, and their sellers aren't realistic.

In some cases, sellers feel as if their real estate agents abandon them once they sign the listing agreement. Many sellers, if they know that a listing agent is doing all that he or she can for them, will hang on and renew a listing agreement several times.

If a listing agreement allowed sellers to cancel at any time, for any reason after the first 90 days, with 30 days notice, sellers would be assured they could get out of a bad arrangement. And they would be encouraged to stick with their current agent to get the property sold.

Signing a 365-day listing, as is the practice in some areas, isn't prudent for sellers, especially if the agent isn't one of the good ones.

I'm sure if you look around your office, you'll see that 20 percent of the agents do 80 percent of the work. Assuming you're a good agent, if you have a seller who is smart enough to sign on with you, you should be fine with this arrangement.

I'll agree that it is costly to list, show and advertise a home, but the listing broker gets paid an average commission of 5 to 6 percent.

There has always been a tradeoff in the residential real estate industry between the cost of marketing a home and the commission for the sale. Some sales will go quickly, and you'll reap a larger reward.

Because that's the deal, I think sellers should limit their listing agreements to 90 days, or include the right to cancel after the first 90 days.

On the plat map of a piece of property in a subdivision that I have been looking at, a 26-foot easement is indicated at the back of the property. The plat map only says easement. Would this be a general utilities easement or is it possible that it could be some other kind of easement?

Your question would best be answered by a real estate attorney. But in general, subdivisions have easements along the rear, side and front areas of real estate lots to allow for utilities. In some cases those easements allow open space areas or setbacks between homes and other lots in the subdivision.

A utility easement to the electric company would allow the utility to maintain electrical wires, transformers and other equipment on the easement, even if it's in your backyard.

To know what the easement is for in your subdivision, consult the plat of survey for your lot. It should give a description of the easement; it may say what it is for or reference a legal document that will give a description.

In some cases, rear areas of lots have easements for water retention and drainage.

Write to Ilyce R. at Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022; or e-mail thinkglink@aol.com.

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