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How long is a typical extension clause?

Posted by weedyacres (My Page) on
Sat, Nov 3, 12 at 21:44

In a listing agreement, the extension period, during which, if someone buys the house after the contract expires the agent still gets the commission...what's typical in your area?


Follow-Up Postings:

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RE: How long is a typical extension clause?

In my area, it is six months. However this is if you sell it to someone who saw it during the listing period.


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RE: How long is a typical extension clause?

I know you didn't get too many people through the house as a FSBO, but you can also list the names of the potential buyers who did come through and figure out some type of reduced but fair compensation to the realtors.

I would also only list for 90 days w/renewal option. Many agents try to lock you in for 6 months ... a long time if the relationship doesn't quite work out. Also make sure you can cancel the listing for any reason.


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RE: How long is a typical extension clause?

Weedy, you need to make sure your understand the clause. It typically doesn't say the agent gets a commission if the house is sold during the extension. It says if it is sold to some one that is the result of the agent's efforts, eg some one that looked at the house when it was listed. If it is listed with a different agent, the clause does not apply. The purpose is to prevent sleazy people from saying to a buyer, "Hey, my listing expires in x amount of time. Come back then, and I'll sell it to you for less without the agent." Yes, it does protect the agent.

I think the clause was for 180 days in this state. Like all aspects of contracts, this is negotiable.

That this scenario would actually happen is rare.

When I worked as an agent, I would list the names of any buyers shown during the FSBO period and exclude them for 10-14 days. They were all contacted. In theory, it would "force" the buyers to make an offer or not. Not once did a buyer that had seen a property while FSBO buy it within that time period or later.


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RE: How long is a typical extension clause?

Sounds like the 60 days in our proposed listing agreement is reasonable. And it does say only those procured during the listing agreement, and doesn't apply if we relist with another agent.

I'm 99% sure that none of our FSBO viewers will buy, as we either know that they bought something else or there was a reason ours wasn't a fit. Interestingly, though, when I asked this question in our agent interviews, all of them said they'd get the full commission even if we sold it to someone we found. I guess that provides an incentive for us to prod any on-the-fence FSBO viewers to get in an offer before we listed.

Our listing agreement is for 6 months (typical in this area) but does have a provision for cancellation at any time if we're not happy.


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RE: How long is a typical extension clause?

Regarding prodding any FSBO hanger's-on: contact them immediately, especially as you have a (potentially) 30K price reduction in play if you can avoid a REA commission.

I wouldn't kick in the entire 30K, as you will have more work and annoyance and cost doing it all yourself.

It's a long shot, but close it out and move on knowing that listing is the best move now.

L.


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