Details of a Listing Contract
In most areas there is a "customary" percentage that real estate agents and companies expect to earn as a commission. The percentage varies from region to region, and depending upon whether it is residential real estate or commercial real estate. However, just like anything else in real estate, this amount is negotiable. When completing the listing agreement, you and your agent will agree on the amount of the real estate commission.
The listing contract also specifies when the commission is earned. This is important and you should pay close attention:
If a ready, willing and able buyer presents an offer that meets your listing price and terms, the agent has effectively earned the commission at that time. If a buyer presents an offer and you reach agreement on price and terms through counter-offers, the agent has also earned his or her commission.
Sellers occasionally get cold feet, just like buyers do. If this is going to happen to you - make sure you consider it before you agree to terms with a buyer.
Once you reach terms with a buyer, you have incurred two contractual obligations. One is to the buyer and the other is to your agent. if you should decide to cancel just because you've changed your mind about moving -- the agent has earned their commission according to the terms of most contracts. They will probably want to be paid.
copyright 2000 by Terry Light and RealEstate ABC, revised 2002