It can be intimidating to get a stack of pre-printed contracts and forms. Just remember, all those terms may appear locked-in, but they are negotiable. Don’t be bullied into accepting brief, misleading explanations. What’s more, you can make additions and changes to most clauses.
While you will want to review each clause, here are a few things to pay special attention to.
Co-Op Fee or Buyer/Broker Compensation
Your agent may present you with a listing contract that does not specify how the commission or co-op fee will be split. Sometimes, that split is disclosed only on the MLS data sheet, and often specifies a 60/40 seller/buyer split. As the seller, you are better off with a 50/50 split. You’ll pay the same agreed-upon commission either way. Designating that a higher percentage of your money goes to the buyer’s agent, however, creates an incentive for more agents to show your house to more potential buyers.
Boilerplate contracts often set terms ranging from six months to a year. That might be okay, as long the contract includes a guarantee letting you cancel anytime. Even with that clause, it makes sense to negotiate a contract committing you to between four and six months.
Whatever the period, make sure your contract includes a “satisfaction guarantee” clause. That can ensure better service overall, especially when it comes to improving the listing presentation and broadening exposure. And, no matter what, as a seller, you may cancel the contract at anytime with written notice.
You know why lots of second-time home buyers choose an Exclusive Buyers Agent over a traditional real estate agency? It's because they've already been through the process—and realize there's a better way to buy a house.