Nothing is as disheartening as the expiration of a listing agreement without selling your property. The initial delight from signing the listing agreement with your real estate agent quickly fades, giving way to disappointment and anxiety.
The home selling process might be the largest financial transaction of your life, so it’s normal to feel overwhelmed with emotions. While you might have anticipated that your home will sell fast and fetch a reasonable price, you might start feeling frustrated if the weeks and months go by without any offers.
If you’re wondering what happens if your listing agreement expires without selling your home, look no further!
We’ve compiled a comprehensive article on everything you should know about listing agreements and how to go about selling your property after your agreement expires. Read on to learn more.
Can You Sell an Expired Listing?
Yes, you can still sell an expired listing. However, numerous real estate agents have a listing protection period. This listing protection, which often lasts about three months, requires you to pay your agent a commission for any successful home sale.
So, if you plan to sell your home through another agent or sell privately, you must wait until the listing protection period is over. Otherwise, you can proceed with your home sale using the initial agent and the same terms and conditions of your listing agreement.
Types of Listing Agreements
Considering putting your house up for sale? It’s wise first to familiarize yourself with the different types of listing agreements.
A listing agreement, or listing contract, is a document wherein the property owner or seller gives the agent or broker the right to sell their property. For this service, the seller pays the agent or broker a commission.
Based on your unique situation, here are some of the most common listing agreements to consider:
An open listing allows you to sell your house by yourself. It’s a non-exclusive agreement, meaning you can work with multiple listing services.
As the home seller, you only pay a commission to the agent who finds a potential buyer with an offer you’re ready to accept. However, if you successfully find a buyer yourself, you don’t owe the agent or brokerage a commission.
While the Open Listing agreement sounds appealing to the seller, it’s not as popular in real estate. This agreement creates competition between the agent(s) and seller to find a potential buyer.
Most agents will only accept this listing agreement if the seller can sell the house themselves or withdraw their listing without notice. Few agents will invest time or money on an open listing unless the property is unique or the inventory of available homes is extremely low.
Exclusive Agency Listing
An Exclusive Agency listing is more like an open listing. The only difference is that, with this agreement, you can only work with one real estate agent.
This agent is free to partner with another agent or broker, which means the second agent can bring a buyer. However, you can still sell the home and not pay a commission.
The lack of total control over the sale of your home also makes this agreement less popular amongst real estate agents. Nobody wants to spend time marketing your house and walk away without a commission because you successfully found a cash buyer.
Exclusive Right-to-Sell Listing
Nearly all real estate agents use the Exclusive Right-to-Sell listing agreement because it grants them complete control over the marketing and sale of your home.
Regardless of whether you (the seller), the agent, or another partnering agent or broker finds a buyer, the initial agent receives a commission.
Although rare, you can negotiate with some agents for an “exception or provision” in your contract. In this case, your agent may accept not to receive a commission if you find a buyer.
Net listing is not a listing agreement per se but still a contractual agreement between the seller and agent. Under this agreement, the seller informs their agent of the money they wish to make from the sale of this home.
This agent can then add the desired commission onto this set price when presenting it to potential buyers.
Unfortunately, the skepticism surrounding the Net Listing agreement makes it illegal in most states. If the agent obtains a purchase offer substantially higher than the seller’s net listing price, the seller may feel deceived and accuse the listing agent of lying about the home’s true value in the real estate market.
Likewise, if the agent receives a low purchase offer close to the net price that yields little or no commission, the agent may be tempted to avoid presenting the offer to the seller.
Currently, the Net Listing agreement is only applicable in Texas and California. Both states have rules to protect sellers and avoid potential conflicts.
How Long Is the Average Listing Agreement
The length of listing agreements varies based on the preferences of the seller and real estate agent. Nevertheless, most agents or brokers present standard contracts to their clients.
Most of these contracts run three to six months, but some can even last a year. This period allows the agent enough time to market your property, attract potential buyers, and negotiate a successful sale. You can also assess the agent’s performance and decide whether to renew the contract or try another agent or broker.
You can request a longer or shorter period from your real estate agent. However, you should note that you cannot withdraw your contract once you sign the agreement.
Why Do Real Estate Listings Expire?
As fears of a recession continue growing, expired listings are becoming increasingly common. While the economic situation might play a part, there are many other reasons why real estate listings have an expiration date.
Experienced real estate agents acknowledge that setting the right price for your home can make a huge difference.
If you or your agent overpriced your home in the listing, you will likely drive buyers away. A good agent should perform a comparative market analysis to ensure they price the property competitively.
If there isn’t good communication between you and your real estate agent, you might miss some inputs on your listing that could help sell your house.
For instance, if some potential buyers comment on some flooring or paint, your agent should fix the listing description to improve your listing.
Some agents also fail to disclose all offers immediately, hoping to find better ones. This endless “waiting” may eventually result in an expired listing.
Poor Photography and Staging
Most prospective buyers use online tools to search for available properties. If your real estate agent uses blurry pictures for your listing, it will hardly gather interest from these buyers.
This is also true if you don’t properly stage your home. Avoid taking pictures of cluttered areas, old roofing, and other unappealing aspects of your home.
Lack of Exposure
Another major reason listings fail is that the agents don’t utilize the right marketing techniques. With a proper marketing plan, your listing will reach your desired audience. So, when sorting out agents, pay close attention to their marketing strategies to ensure your property gets as much exposure as possible.
Factors Beyond Your Control
Sometimes, an expired listing boils down to the property not being as appealing to potential buyers. Some factors that are beyond your control include:
- There’s no natural light
- Located near a noisy airport or neighborhood
- Located in a flood-prone area
- Lack of enough parking space
- Limited access to restaurants and shopping centers
What To Do If Your Listing Agreement Expires
You can sell your home even if your listing agreement expires. Here are some ways to go about it:
Extend the Agreement or Draft a New One With Your Agent
If you’re still confident in your agent’s capabilities, consider extending the agreement or drafting a new one despite the expired listing. As you enter this agreement, try correcting some previous mistakes that might have discouraged potential buyers. For instance, you can change the marketing strategy, take new photos of your home, re-paint walls, and more.
Find a New Agent
Refrain from entering an agreement with a bad agent the second time. If your current agent exhibits signs of a bad real estate agent, such as poor communication, being unethical, or not acting in your best interests, consider finding a new one. Ensure you select a professional based on their reviews, sales history, and history of success.
Get a Cash Offer
If your listing expires and you don’t feel like relisting, you can consider selling to a cash buyer. This process is straightforward, and you won’t have to cover costs for commissions and other agent-related expenses.
List the House By Yourself
If your listing expires because your realtor couldn’t sell your house, you may feel tempted to list your property “For Sale By Owner” (FSBO). You might be lucky and find a buyer.
However, statistics clearly show that it’s hardly effective. So, you’re better off with the other solutions.
Can You Sell Privately After a Listing Expires?
Yes, any homeowner can sell their home privately after their listing expires. However, you must wait about 90 days following the expiration for the protection period to pass.
This protection clause, included in most listing agreements, protects agents from sales made by the seller to a buyer they introduced to the property.
You can definitely sell your house after a listing expires. However, you’ll probably have to wait up to 90 days in most cases, as agents include a protection clause in their listing agreements.
If you’re still satisfied with your agent’s efforts, you can sign a new listing agreement and try correcting the mistakes you made in the previous listing. However, if your agent fails you, find another one or get a cash offer for your property!
If you’re looking for cash home buyers in Texas, we buy houses Arlington owners are looking to sell. We have expertise in TX housing market trends, so you can sell a house fast in Dallas or elsewhere in the state by contacting us.