As a home buyer or seller, you may wonder how long a realtor agreement lasts. The answer is not simple, as it depends on various factors such as the type of agreement, the scope of work, and the preferences of the involved parties.
Before we delve into the specifics, let`s understand what a realtor agreement is. A realtor agreement is a legal contract between a real estate agent/broker and a client (seller or buyer) that outlines the terms and conditions of their professional relationship. The agreement is designed to protect both parties and ensure that each party`s rights and obligations are clearly defined.
Based on the length of the agreement, there are four types of realtor agreements: open listing, exclusive agency, exclusive right-to-sell, and net listing. Let`s examine each of them in detail:
1. Open Listing Agreement
An open listing agreement allows the seller to work with multiple real estate agents simultaneously and only pay commission to the agent who successfully sells the property. This type of agreement does not have a specific duration, as it is binding until the seller finds an agent who can close the deal.
2. Exclusive Agency Agreement
An exclusive agency agreement stipulates that only one agent/broker is authorized to sell the property, but the seller retains the right to sell the property on their own without paying a commission. This type of agreement can last for a specific period, usually between 30 to 90 days.
3. Exclusive Right-to-Sell Agreement
An exclusive right-to-sell agreement is the most common type of realtor agreement. It grants the agent/broker the exclusive right to sell the property for a specific duration, and the seller agrees to pay a commission regardless of who ultimately sells the property. The duration of this agreement can range from six months to a year or more.
4. Net Listing Agreement
A net listing agreement is the least common type of agreement. The seller sets a target sale price for the property, and any amount above that price goes to the agent/broker as a commission. This type of agreement is illegal in some states and is not recommended as it can be unfair to the seller.
In conclusion, the duration of a realtor agreement varies, depending on the type of agreement and the terms agreed upon by the parties involved. It`s essential to carefully read and understand the agreement before signing to avoid misunderstandings or unwanted obligations. As a buyer or seller, choose an experienced and trustworthy agent/broker to help simplify the process, find the best deal, and ensure a smooth transaction.