Like practitioners in any profession, West Chester real estate agents and brokers have a unique vocabulary. We help our clients through a standard process and require industry-specific legal paperwork.
Agents and brokers use that paperwork every day, so we’re familiar with it. Sometimes we forget that real estate terms and forms can be Greek to our clients.
No one wants to appear clueless, so many real estate consumers avoid asking questions about things they don’t understand.
Today we’re introducing you to two of the most important forms that your West Chester listing agent will ask you to sign.
The first thing to understand about “agency” is that it is a legal term that applies to a relationship in which one party is representing another in dealings with a third party.
When selling your West Chester home, your real estate agent is his or her broker’s agent – representing the broker in her dealings with you.
Your real estate agent will then represent you in your dealings with buyers.
Think of the real estate agent as the middle-woman, standing in for the person who holds the broker’s license when dealing with you and representing you when dealing with the buyer.
One of the first forms you’ll be asked to sign (if not the first) is an agency disclosure.
It is “a written explanation, to be signed by a prospective buyer or seller, explaining to the client the role that the broker plays in the transaction,” according to Barron’s Dictionary of Real Estate Terms.
The disclosure form explains the various types of agency relationships in effect here in West Chester—or all of PA.
The most common relationships are:
- Single agency: the broker represents only one party in the transaction
- Designated agency: when the buyer and seller are represented by two agents from the same brokerage
- Dual agency: when one agent represents both the seller and the buyer, illegal in 8 states (perfectly legal here in PA)
The agency disclosure form is not a contract. When you sign it, you are merely acknowledging that the broker has disclosed the agency relationship.
Listing Agreement or Contract
This is typically the second form you’ll sign and it gives the broker and her agents the right to offer the home for sale. The listing agreement must contain the following if the broker is a member of the National Association of Realtors:
- The price at which the home will be offered for sale.
- A beginning and ending date.
- The amount of broker compensation and the terms and conditions under which it will be paid.
- Authorization for the broker to cooperate with other brokers and how the broker that brings in the buyer will be compensated.
- Authorization for your broker to either reveal or not reveal the existence of previous offers.
Other items you may find in the purchase agreement include:
- Authorization for the broker to install a sign and lockbox.
- Items the seller wants excluded from and included in the sale.
- Seller’s warranty that he or she owns the home and that there is no pending notice of default.
- Authorization for the broker to advertise the home in the Multiple Listing Service database and/or online.
The listing agreement is a contract, so read and understand everything in it before signing.
Another important piece of paperwork you’ll be asked to sign is the homeowner’s disclosure, which we’re happy to explain to you.
Selling your home in West Chester is a paperwork-intensive undertaking, but nothing compares to the stack of papers you’ll be required to sign at closing. But, that’s a subject for another post!