Most agencies use preprinted listing contracts that are part of forms created by software packages. Preprinted forms are usually developed by attorneys working under contract for the company that sells the software to real-estate agencies. They are based on the laws for the state they are used in, and they might be endorsed or approved by real-estate licensing commissions and agent trade associations.

The forms are a fill-in-the-blanks type of contract covering the most common topics that must be negotiated between a seller and an agency. The forms should include at least one area where special provisions can be inserted — topics that might not be common but are important to your specific listing agreement.

Your listing contract should include the length of time it will remain in force, with specific beginning and ending dates. Automatic extensions are illegal in some states, and they should always be avoided. There's no way that you know going into a relationship that the agent will remain your agent of choice after six months of unsuccessful marketing.

Most agencies have an office policy that concerns the duration of listing agreements. A three-month listing is normal in some areas, but in others you'll find that listings for six months or even a year are not out of line. What's the average time it takes to sell and close a property similar to the one you are selling? Knowing the answer to that questions will help you understand why an agency might ask for a specific length of time to market your property.

The agency's commission rate should be stated on the listing. You might be asked to initial a paragraph that gives the agency your permission to share a portion of the total commission with another agency if that agency produces a buyer. Commissions are sometimes negotiable, but you'll have to decide if it's worth a possible reduction in services to pay a lesser commission.

Another important item that must be entered is the listing price, the price you hope to receive for the property. The contract will probably say that you agree to pay a commission based on the price the property sells for, not the listing price, with the wording written to ensure that both parties are protected — you get an acceptable price, the agency is paid a commission based on that amount.

You'll be asked to give the agency permission to advertise the property and permission to include it in any multiple listing service the agency belongs to. There will probably be a place for you to say it's okay for your agency to place a “For Sale” sign in the yard and a lockbox on the front door. Your agent will explain any other permissions you are asked to give.

Many other important topics must be outlined in the listing agreement, including these:

• The property address and a short legal description that makes it clear which property is for sale

• The names of all owners and a signature from each

• A list of items that will — or will not — convey with the property

• Special showing instructions, such as pet warnings or a requirement for advance notice to show

• Details about owner financing, if you plan to offer it

• Details about the types of financing that are acceptable to the seller. For instance, will you accept a buyer looking for a VA loan?

The contract should cover every aspect of your agreement with the listing agency.

If You Have a Potential Buyer Before You List

Sometimes sellers have a friend or relative who has expressed an interest in buying the property but who cannot move forward for some reason. The seller needs to get the property listed but doesn't want to pay the agency a commission if the interested person decides to buy at a later time.

If that happens to you, ask the agency to exclude the buyer from your listing contract by inserting wording that states you can sell to that specific person without paying a commission. It isn't realistic to expect the agency to exclude the buyer for the entire length of the contract — that would be similar to taking an open listing. What's more likely is that the agency will agree to exclude the potential buyer for up to thirty days or so to give him time to decide whether or not he can buy the property.