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Steve McLinden, the Bankrate.com Real Estate AdviserKeep home listing length just right

Dear Real Estate Adviser,
What is the best length of time to commit to a listing agent; 30, 60, 90 or 180 days? If the agent has paid to advertise our home and our relationship does not work out, will we have to reimburse her for her fees?
-- Linda

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Dear Linda,
I always advocate listing arrangements that steadfastly look out for the best interests of the client. If the allotted days are too numerous, it can invite apathy on the part of the agent. However, if they are too few, that can discourage continuity and even thwart a budding sale.

But I think a 30-day listing is just too truncated, unless the market is simply booming. Even then, the most earnest, successful agents may not be able to produce a buyer in a month. In fact, a lot of real estate companies will not even accept 30-day contracts. Too many things can go wrong, even with a "sure-thing" buyer. For example, the buyer can't qualify, he changes his mind, he must sell his slow-moving home first, bad weather strikes on open-house weekend, repair or disclosure issues suddenly arise, etc.

On the other hand, I like 60-day or 90-day contracts because they demand performance in a time frame that's fair for both parties -- although many agents will argue that 60 days is still too short. Sometimes, you have to tailor your listing contract to the average time on the market that it currently takes to sell a house where you live -- not the average sale time over the last year. Some markets that were bustling a year ago have softened, in which case a 90-day contract may be more practical.

But do not accept a 180-day deal. Such half-year contracts can invite procrastination and minimal accountability, especially if more potentially profitable listings come along for the agent. An exception to that is if that agent will allow you to add an unconditional cancellation clause to the listing agreement that allows you an "out" after 90 days. That at least gives you some assurance that the place will be marketed aggressively. If the agent doesn't agree to that, find another agent. Similarly, you might ask for a 30-day "out" on a 60-day contract in the more active sales markets.

As for the "lost" marketing costs on a failed sale, most realistic agents just write this off as the cost of doing business. But some will try to structure the listing contract to try to recapture the expenses if you bow out early. Before you sign, check the listing contract for "special assessments" or marketing fees. Some agents stipulate they will charge from 1 percent to 2 percent of your asking price if you cancel before the contract expires.

The seller, as well as the agent, should always act in good faith. For a faster sale, be sure to facilitate the sales process every way you can, in accordance with your agent's recommendations.

Happy selling.

To ask a question of the Real Estate Adviser, go to the "Ask the Experts" page, and select "buying, selling a home" as the topic.

Bankrate.com's corrections policy -- Posted: May 27, 2006
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