Completing the Seller Representation Agreement (Listing Agreement)
Your written service agreement is a seller representation agreement, also called a listing agreement. The agreement includes the details of the listing, including listing price, inclusions/exclusions, possession date, and lists your responsibilities and obligations as well as those of your real estate professional.
Setting your listing price is important. Your real estate professional has tools and information to help set an appropriate price.
One of these tools is a Comparative Market Analysis (CMA). In a CMA, real estate professionals use data about recently sold comparable properties to arrive at an appropriate listing price for your property.
The listing price is your decision – but your real estate professional’s job is to help you set one that will sell your property for the most amount of money in the least amount of time.
Residential Measurement Standard
Your real estate professional is required to talk to you about property size, and the Residential Measurement Standard (RMS) in Alberta. Real estate professionals in Alberta must use the RMS when describing a residential property’s size.
The RMS offers a consistent means of representing a property’s above grade size by setting out what parts of a property can be included in its measured-area.
If there are areas of your home that cannot be included when using the RMS, but you feel are an important selling feature, you can communicate those to potential buyers as additional information. Ensure the additional information isn’t misleading, and remember that if you are only including one size representation in the listing, that size must be the RMS size.
Remember that property size isn’t the only thing buyers use to decide how much they are willing to pay for a property. Two homes, with the exact same measurements, are unlikely to sell at the same price. The selling price of a home will also depend on location, features, décor, and upkeep.
Seller Representation Agreement – Additional Considerations
Dower rights: In Alberta, if you are married, but your spouse isn’t a registered owner on your property title, you may need their consent in order to sell the property. The seller representation agreement refers to spousal consent, and your real estate professional can provide you with more information.
Possession date: You can list a specific preferred possession date or you can indicate it is negotiable. It’s up to you if you are willing to negotiate the possession date.
Attached/unattached goods: Attached goods are items you cannot remove from the property without causing damage or that are physically attached to the property via pipes, screws, bolts, or nails. Attached goods stay with the property unless there is a specific exclusion in the listing agreement or in a buyer’s offer to purchase. These include:
- water softener
- kitchen cabinets
- built-in appliances
- central vacuum system
- garage door opener
Unattached goods are movable items. Sellers usually take unattached goods from the property before the buyer takes possession. These include:
- wall art
- area rugs
- drapes hooked on curtain rods
- attachments for central vacuum system
- remotes for a garage door opener
- movable kitchen island
Attached goods are typically included with the property while unattached goods are not. If a buyer wants an unattached good included in the purchase of the property, such as the garage door opener or the attachments for the central vacuum system, they need to list it as an inclusion in their offer to purchase. As the seller, you would have to agree to such an inclusion as part of your acceptance of their offer. If you plan to take the unattached good, you need to put that in a counter offer to the buyer.
Inclusions/exclusions: Inclusions are items you are including with the sale of your home and exclusions are those items you will exclude. Be specific with your inclusions and exclusions in your listing agreement and in any offers/counter-offers.
Material latent defects: Material latent defects are defects a person cannot discover with reasonable care during an inspection. They include defects that:
- make a property dangerous or potentially dangerous
- make a property unfit to live in
- make a property unfit for the buyer’s purpose (if the buyer has told their industry member or the seller’s industry member the purpose)
By law, sellers, and their real estate representatives, must disclose known material latent defects to potential buyers.
Material latent defects may include:
- the seller has finished the basement of their house and in the process covered the large crack in the basement wall that affects the structure
- the seller has finished the basement of their house, or built an addition or a garage, without the appropriate permits
- the seller knows that whenever it rains, water enters the house
- the home was a former marijuana grow-op and repair of the property has not occurred.
Stigmatized properties: The term “stigmatized” means an unfavourable quality in a property or one that makes the property less attractive or unattractive, but that is unrelated to the physical condition or features of the property. Stigmas may include:
- that a suicide or death occurred in the property
- the property was the scene of a major crime
- the address of the property has the wrong numerals
- reports that a property is haunted
You are not required to disclose stigma to potential buyers because they are not material latent defects. The buyer or buyer’s representative may ask you about possible stigma. You are not required to answer their questions, but if you choose to answer – you must do so honestly. If you refuse to answer, the buyer will have to decide if they’re comfortable proceeding without the information.