exclusive listing agreements

Choosing representation can be a vexing decision for a seller; but your question indicates a lack of confidence in your choice of broker. It's not really about how short is a "reasonable" length for the exclusive period. I always get a six month exclusive. Most things sell much quicker if they are priced properly; But it can take longer. Hire an agent who does their job, advises properly on asking price, and takes a six month exclusive because they are committed to your business. If you aren't convinced that they are a true advocate for you, and you want to limit your exposure by signing a short exclusive, then keep looking for the right person. You are hiring a competent manager of a process that will affect your net worth for years to come. So my advice is to go with your gut and find the person who is going to shine. When you get that, they will pay for themselves in shorter time frames and better returns too. -comitini

An additional question re: listing agreements. What is the typical length for the exlusionary period whereby no commission is paid to individual(s) who previously expressed an interest in the property? Is this period negotiable?

I just had the same discussion with a prospective listing broker last night. He said the industry standard in NYC is 6 months. I am concerned about that, and if he is inflexible on that point, I may go with another broker. I want to actually price lower than he suggests too.

My cursory examination of their agreement is that it is totally one sided, all in favor of the broker.
I.e. in case of a failed deal, the broker keeps half the forfeited deposit. (wtf? - the earnest money was supposed to protect the seller not be a prepayment of the commish)

Anyways, I am going to push back on that, among other points....

we sold an apartment with a 3-mnth exclusivity period, though I understand that 6 months is not uncommon. In my opinion if a broker cannot generate a sale within -months for a properly priced property, you should have the right to terminate the agreement (or extend if you think the broker is doing his/her job properly).

As for the broker keeping half of a 10% deposit on a failed sale, that is more commission than a broker would make on an actual sale, which is a perverse incentive scheme. Furthermore, the deposit is there to protect you against delays, legal costs and potential declines in the market while you look for another buyer. It is not there for the broker, who has no capital at stake. I would NEVER agree to such terms, and would in fact never hire a broker who even enetered such a clause in an agreement.

That's exactly what I thought CMTSUK w/r/t deposit.

The broker should have incentive to procure fit buyers--not just any old buyer. If the broker builds in a reward for themselves to proffer unfit buyers who get rejected, that seems counter to their role, your interests and the broker's fiduciary duties of loyalty to you. Yes, you can negotiate some terms of a listing agreement, but I would be wary. Do I really want to do business with someone who comes on so strong with non-standard terms that benefit only the broker? There are plenty of decent brokers out there who you can actually like working with (I have one whose been doing a great job on two sales and a pending purchase). I personally wouldn't work with a broker who gave me the feeling they were an adversary of mine or trying to interject extra terms that only benefit them.

huh: If I were you, I would stay away from a broker that suggests that HE keeps half the forfeited deposit. You should ask your lawyer if it is even legal in this state. Forfeited deposit is meant to cover YOUR damages. It's you who lost time and money (supposing the property is not occupied).

Obviously, that broker is not a member of local MLS. MLS member can only offer sellers to sign STANDARD agreement which of course does not provide for any of that nonsense. I'm not sure for REBNY, but Brooklyn MLS and my broker would never allow me to offer such kind of "deal" to my seller.

From practical point of view, I can say that less than 1% of all deals wind up with forfeited deposit. Usually the buyer is able to get away with mortgage contingency, home inspection contingency, etc. That must be a truely greedy (or inexperienced) broker that would want you to sign a listing agreement on these terms.

However, I know few cases where sellers that got "free money" (deposit) tipped listing brokers with a thousand or two. But it was their free choice :)

I realize a truly forfeited deposit is rare, and probably going to be subject to litigation anyways, but that clause stuck out like a red light in a five minute inspection of the contract. In any case the broker has not responded to my email about it so I'm going to interview two other listing agencies who do work in my building.

Something to just consider: sometimes brokers who work a tremendous amount in one building get a little cocky about what is and isn't the way to do things there. It may simply be that they are used to how they do things there. If you like a broker who isn't all that familiar with a particular building, I wouldn't let that be a deal buster in signing with them. This isn't rocket science and a smart broker can learn whatever they need to know. I had participated on my coop's board and committees and knew the building I sold my coop in very well. I gave my broker the info and voila: she was an expert in the building.

What's more important is a broker's credibility, ability to listen and not just talk, skill at negotiating, skill at vetting a qualified buyer so you don't waste your time, attention to detail in assisting buyers when they prepare the board packet so it's perfect, and the agent's overall 'like-ability' which buyer's will respond to.