QUESTION: A while ago, you wrote an article outlining the pros and cons of selling a home privately versus using the services of a listing broker. Can you now outline specific functions and assistance a listing agent would provide me in selling a home beyond assisting in the pricing and marketing of my home?
ANSWER: In preparing this article, I spoke with a few local real estate agents who were more than happy to elaborate on their duties as selling (or listing) agents. I thank them at the outset for their input.
There are many services offered by a listing agent beyond simply listing and attracting would be buyers. Below is a short list of specific functions or assistance offered by a listing agent:
1) Marketing the Property: Briefly, in order to get the best price for your home, you must expose the property to as many potential buyers as possible. This is usually the primary reason vendors list a home with a real estate broker, rather than selling it privately. What this accomplishes is it takes the act of simply selling a home, to actually marketing it. Through effective marketing of your home, you maximize exposure and hopefully attract the best price for your home.
2) Validating any Offers to Purchase: Your agent will only present you with those offers and counter-offers that are legal and enforceable. To begin with, only those offers made in writing and properly executed and dated by the potential purchaser will be presented to you.
Any subsequent counter-offers made by you, or the potential purchaser, will also be verified to ensure they can become legally binding if accepted. This is to ensure, as best as possible, that once a contract is entered into, there is no chance for the transaction to fail due to a lack of proper contractual formalities being satisfied.
Note, a real estate agent is not in a position to provide a legal opinion or legal advice, and usually, you will be referred to a lawyer if and when the need arises. However, your real estate agent may be able to provide you with his/her best advice given his/her experience and training.
Much to the credit of today’s licensed real estate agent, I often have agents contact me to review wording on various clauses, provide comments on certain situations, and so on. Today’s agents strive to look after their clients best interests and if that requires them to sometimes seek assistance, they do not hesitate to do so.
3) Pre-qualification of Purchaser: Prior to, or shortly after your listing agent receives a valid written offer, he/she will determine, amongst other matters, whether the potential purchaser has been pre-qualified for a mortgage.
It is well known that one of the most common reasons real estate transactions fail to close is the inability of the purchaser to acquire financing. The problem for you, as a vendor, is once the offer is accepted, the home is effectively taken off the market. Subsequently, if the purchaser fails to acquire financing, you will have lost valuable marketing time.
To avoid such a result, the listing agent will usually attempt to discover as early as possible, details about the potential purchaser’s financial arrangements or ability to finance the transaction. This does not mean the listing agent can guarantee the potential purchaser will be able to acquire financing — anything can happen. However, your listing agent’s searches will help to minimize the odds of the transaction failing due to an inability to acquire financing.
4) Negotiating any Offers to Purchase: The listing agent can also scrutinize any offers and determine if there are any opportunities for negotiating to your benefit.
Generally, the process of negotiating is very quick and usually begins with an initial offer by the purchaser which is then countered by the seller. This process of making offers and counter-offers can go on and repeat itself many times before a final agreement is reached.
Keep in mind that once a counter offer is made, the last offer that was presented becomes automatically revoked and can no longer be accepted.
Above are only a few of the benefits associated with retaining the services of a listing agent in selling your home. There are of course many intangibles such as the security of knowing you have the assistance of a professional who sells many homes through the course of a given year. Nothing can replace experience. Best of Luck!
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Victor Hussein is a Kitchener Waterloo lawyer, specializing in real estate.