Question: I’m being transferred overseas next year, and am deciding whether to sell my apartment or put it up for rent. I’ve spoken with a couple of real estate agents, and they all want me to sign a contract with them. Should I?
— Soon-to-Be an Expatriate in Park Slope
Unless you have the time, energy and expertise to sell or rent your place on your own, my answer is yes. Settle on an agent, and sign a contract.
Broadly speaking, there are two types of contracts between property owners and agents: Exclusive agreements and open agreements. Ninety-nine percent of the time, you will be asked to sign an exclusive agreement, which gives one particular agent or brokerage firm the exclusive right to sell or rent your apartment.
For typical sales — i.e., not a place like this — the contract is a boilerplate, preprinted, fill-in-the-blanks form. Most of the terms, such as the commission, are, technically speaking, negotiable. That’s right, you don’t have to pay 6 percent, but that is the customary figure in New York. The contract term is usually for 90 days, although six months is not unheard of.
In that time, you have granted the agent the right to advertise and show your apartment to prospective buyers and to receive offers and to open negotiations on your behalf. Important: The real-estate agent is a fiduciary — a fancy word that means, seriously, that the agent must perform his or her duties in your best interest.
Since, presumably, you want your apartment sold at the best price in the quickest time to the most qualified buyer, then it’s in your best interest to have a contract with an agent who is obligated to get the best deal for you.
So, sign already. And enjoy your time abroad.
Final note: If you decide to rent instead of selling, remember that in New York City, it’s the renter who typically pays the commission, not the landlord. Be sure the boilerplate form contract is particular to the city and makes that clear. You don’t want to slip and end up agreeing to pay a commission.
David Crook is a veteran journalist and author of The Complete Wall Street Journal Real-Estate Investing and Homeowner’s Guidebooks. Do you have a question about anything real estate-related in NYC? Write him at firstname.lastname@example.org. For verification purposes, please include your name and a phone number; neither will be published. Note: Nothing in this column should be considered professional legal advice. If you have a legal issue, consult an attorney.
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