Robert Kraft is a Sprout Realty real estate agent. To contact him, click here


Pretend you just decided to sell your home, and you want to work with an agent so that instead of spending months trying to learn the ins and outs of selling a home, you can stay focused on the things that matter most in your family's transition. So you call a few brokerages, and you find an agent who wants to help. What's the most important thing to remember before you go to your consultation? It's this: 

But don't sign anything before you understand the contract. If you go in knowing what to expect, then if anything looks unusual, you can recognize it and address it. 

If you ever find yourself speaking with an agent who is being pushy trying to get you to sign an agreement, without taking the time to answer all of your questions exhaustively, don't sign it! Unfortunately, there are agents in the market who choose to use the listing agreement as a way to trick home owners into paying them without actually selling house, and they do it by using legal loopholes, so technically, it's not illegal. 

That's why we're writing this list—so you that know the most important things to look for in your listing agreement, to protect your family from dishonest agents who might exploit you. 

1. Don't sign anything that doesn't specify a clear term.

Listing agreements are legal documents. 

If you sign a document that doesn't have a clear statement for how long the agreement can last, then you might accidentally fire an agent who has the legal right to a commission once your home sells. That means that if you don't specify how the contract will end, you might be legally obligated to pay that agent a fee, regardless of whether you sold your home through them or not. 

By the way, if you ever have to fire your agent for any reason, make sure you get a copy of the voided listing agreement. That leads us to number two, the protection period. 

2. Only sign an agreement with a protection period of 0 days.

We offer agreements with an protection period of zero days.

Anyone who knows what a protection period really is knows that we do it that way for really good reason.

The protection period can be used against you in this circumstance: Pretend you're working with a certain agent, but you decide that for whatever reason, you want to work with someone else. But what you didn't know is that the first agent technically has the legal right to claim their commission, no matter who sells the house, as long as it is within the agent's contractural "protection period." Then, if the new agent sells your home for you before the end of the protection period, and the first agent can demand payment for his services, and you might be legally obligated to pay them.

For those of you in business, the protection period functions very similarly to a non-compete agreement, except that it is only enforced in the event that the house actually sells.

Again, at Sprout, we only work with listing agreements with a protection period of 0 days, because we only want to do business with those who want to do business with us. No tricks, no loopholes to exploit. 

3. Make sure there is a 'Special Provision' saying that you, the seller, reserve the right to withdraw your home from the market for any reason at any time. 

This is very important. 

If you sign a listing agreement that gives a brokerage the right to act as the agent for the sale of your home, but you don't specify that you reserve the right to withdraw your home for sale, you could end up having to sell your home against your will, essentially allowing the agent to evict you from your own home. 

That seems like it should be illegal, but the listing agreement might protect the agent legally from any recourse. That is to say, if you sign a bad contract, and then you change your mind and decide not to move, the agent might be able to force you to keep your home on the market, to keep the lockbox on your door, to do showings—basically whatever the listing agreement allows them to do. 

So it's very important to have the special provision.

NOTE: If you decide to accept an offer from a buyer, you will have to enter a contract that protects the buyer from the seller backing out. After you go under that contract, a special provision will not protect your right to stop the sale of the home. That means that the buyer's contract will obligate you to move, regardless of what the listing agreement says. This is almost never an issue, but it's worth clarifying. Also, in some unique circumstances, there are exceptions to this rule, especially in luxury real estate. 

4. Know whether the agreement is open or exclusive.

Basically, an open agreement allows you to be in business with multiple agents who are competing for your commission. There are a lot of good reasons why that's the wrong way to go, but the major one is that unless your agent knows they're ensured a commission by doing good work for you, they'll be more motivated to take initiative when issues come up, and they'll feel more comfortable working with you. 

At Sprout, we use an exclusive agreement in which the seller reserves the right to terminate for any reason with 24 hours notice, unless they've already signed a contract to sell the home to a specific buyer. That means that if for any reason, you feel like you'd like to work with another agent, you can just give us notice and work with them. 

We believe that there are no good reasons to trap someone in an agreement they won't be happy with if something goes wrong. 

5. Specify anything you want to keep in the exclusions, including appliances. 

Anything that could be considered an accessory of your home should be listed in the exclusions section of the listing agreement. 

That means items like blinds, curtains, fireplace screens, TV wall mounts, and importantly, appliances. If you want to keep your refrigerator, your oven, your washer and dryer—anything that is technically considered an appliance—make sure to remember each one and list it individually in the listing agreement. 

6. Make sure the agreement specifies that agents are to be paid after the home closes and funds. 

Many agents believe that they are entitled to payment when you accept an offer from a buyer. 

But there is an option period in the buyer's contract for a good reason: Sometimes deals fall through. If you don't specify when the agent will be paid and from what funds, then if you or your buyer choose to cancel the deal, then you might still be legally obligated to pay your agent for his/her services, even though the house didn't actually sell. 

Agents should be paid only when the home closes and funds are paid to the seller. 

NOTE: There are a few unusual circumstances when you should pay your agent from a different secured money. But those occasions are rare, so unless there is some unique circumstance, make sure the listing agreement reflects how and when the agent will be paid and what entitles them to payment. 

7. The listing agreement should specify exactly when and how the agent can access your home for showings. 

If you live in the house you're selling, you might want to consider when your house should be available for showings, and what the terms are for showing your property. This is also where you will give the agent permission to keep a spare key in a lockbox on your door. 

In our listing agreement, we specify this very clearly, and we work with each client to make sure the agreement suits their lifestyle and needs. We even specify that it's a SUPRA lockbox going on your door. Industry standard is that agents agree to give at least two hours notice before entering your home or showing your home, unless otherwise specified. 

And of course, it goes without saying, but here it is: At Sprout Realty, we use best practices for every step of the real estate process, and that includes any legal documents. That means we will only put in the agreement what is in the best interest of you and your family, and also that we will not ask you to fill out anything you don't understand. 

We only want to work with people who want to work with us—not people who feel like they've been forced into it because of some contract. That's also why we promise to explain each piece of the agreement with you without pressuring you to sign it, so you have full authority over what happens with your home. We're proud to do it the right way, every time.