The Addendum to Listing Agreement Will Make You Lots of Money!

Schedule a FREE Strategy Session

Transcript:

Today I want to briefly cover the addendum to listing agreement, which you fill out for every listing.

The most important part of the addendum is the Pricing Strategy Agreement. It's rare for us to actually write in pricing adjustments, but we do make sure to set expectations for the seller up front. If that data suggest a home will likely sell at $220K-$225K, but the seller wants to list at $250K, you need to let them know you will do everything you can to sell at that price.

However, you also need to let the seller know that you are going to be meeting with them every 30 days to discuss what's going on in the market and whether the market is responding to the price agreed upon.

If the seller is not happy, you need to let them know what their course of action is in the Cacellation Guarantee & Release of Listing. Additionally, the addendum to the listing agreement should have a section that explains the transaction fee that is in addition to the agent's commission and which covers the "contract to closing" portion of the transaction.

Of course, there also needs to be an Expiration of Listing section detailing what happens should the property not sell in the first six or so months.

Lastly, you need to have your client sign that they are aware that they are overpricing their home (if applicable). This agreement states that the "Seller acknowledges that against the recommendation of the Listing Agent that the Initial Asking Price is above Market Value."

Even though you are going to give the home your best effort to sell at the asking price, having them sign this section will prevent sellers from coming to you and complaining when the market doesn't respond to the high price.

This is a very valuable document that will make you lots and lots of money!