What Exactly is a Listing Agreement?
Listing a property is one of the vital components of real estate. What does that actually imply, though? A listing agreement is a binding legal document that establishes an agency relationship and designates a broker as the principal’s agent in real estate transactions. It gives an agent the sole power to manage the property sale in exchange for a fee or commission for their services.
Types of Listings in Real Estate
The right real estate agent will be a great help when looking for a house and lot for sale. But for it to successfully happen, it is important for them to know the types of listings in real estate. After all, the main responsibility of this role is to assist clients in navigating a complex procedure that centers on what is probably the biggest purchase they will ever make. To know more, here are the listing types:
Foreclosure
By seizing control of the property that is subject to a mortgage and selling it, a lender might try to recoup the money owing on a defaulted debt through the foreclosure process. Usually, a borrower enters into default when they fall behind on a predetermined amount of payments each month, but it is also possible when they violate other conditions stated in the mortgage agreement.
The house will go up for foreclosure auction if the owner doesn’t settle any outstanding obligations on it or sell it through a short sale.
The lender will then have possession of the property if it is still unsold after the auction. After 90 days of late payments, the lender issues a notice of default. The debt is turned over to the lender’s foreclosure division, and the borrower normally has an additional 30 days to catch up on payments and bring the loan back into good standing. To avoid foreclosure, there are still ways to avoid it such as reinstatement, short refinance, and special forbearance.
Short Sale
When a property is sold for less than is owed on its mortgage, this is known as a short sale. In a short sale, the seller covers the shortcoming in the amount due to purchase the property. Both homeowners and banks frequently employ these as a backup plan to prevent foreclosure.
All of the sale proceeds go to the original mortgage lender, who then either forgives the difference or obtains a deficiency judgment compelling the original borrower to pay the balance. If done carefully, a short sale might be an outstanding chance for a house buyer. Real estate brokers and real estate websites typically list short-sale properties. Some items may not be advertised as short sales, so check for hints within the description of some house and lot for sale under this listing.
Probate Sale
Probate sales take place when a homeowner passes without leaving a will or passing the property to someone else. The probate court will approve an estate attorney to hire a real estate agent, who will be in charge of selling the property.
Looking for a property? People may encounter probate sales. These can be one-of-a-kind opportunities to buy real estate. Is a probate sale the best option? It can be if the person is seeking for an inexpensive home and has the patience to wait. They can be complicated, and the homes involved may need some renovations, but the purchaser has a good chance of getting a good price. If the buyer is a first-time homebuyer or needs a home urgently, probate sales should be avoided.
Hence, people who might want to buy probate real estate must undergo a legal process. The probate process can take several months, so be prepared to wait. To make an offer on the place of residence, the buyer will most likely coordinate with the executor of the estate, a real estate attorney, or the court. Keep in mind that probate real estate is typically sold “as-is.” The former owner could have been elderly people or have had health difficulties that made housekeeping difficult. That means a house inspection is vital, and the buyer should be prepared for unforeseen costs.
Trust Sale
A trust sale is when a home is sold by a trustee rather than a private person. This is common when the original homeowner dies and transfers their possessions to a living trust. Trustees who never resided in the property for sale are not required to provide the same disclosures as sellers in a traditional transaction.
What are the 3 Most Common Types of Listings?
Open Listing
A seller with an open listing retains the right to hire any number of brokers as agents. It is a nonexclusive listing in which the seller is only bound to pay a commission to the broker who successfully secures a ready, willing, and able buyer. The seller keeps the opportunity to sell the property on his or her own without paying a commission. Basically, an open listing in real estate is a property for sale that can be viewed by several real estate agents. The agents compete to find a buyer for the home.
Exclusive Agency Listing
One broker may represent the seller as the sole agent under an exclusive agency listing. Without being obligated to the broker, the seller is still free to sell the property. However, if the broker is the one who procured the sale, the seller must pay a commission to the broker.
Exclusive Right-to-sell Listing
The most typical type of contract is an exclusive right-to-sell listing. In a listing agreement of this type, a single broker is designated as the sole seller’s agent and granted exclusive authority to represent the property. No matter who sells the property while the listing agreement is in effect, the broker will be given a commission.
Now that the different listing types have been discussed, this article will serve as a great help for the buyers as well as for the property owners on what to consider and what processes should be done prior to the purchase. Thus, if the buyer wants to look for a house and lot for sale that offers convenience, and comfort, and is placed in a prime location, Crown Asia has it.
Related Blog: Things to Know When Buying Property in the Philippines
