If you’re selling a home in NYC and your current listing agreement is about to expire, you might be wondering what happens next. There are several options to consider when your listing agreement expires in NYC. We’ll discuss your possible next moves and share a few other pointers in this article.
The most straightforward option is to renew the listing agreement with your current listing agent. Some properties in NYC genuinely take longer to sell than the term of a typical listing agreement.
The average ‘days on market’ for a listing to go into contract is around 4 months in NYC, so it’s understandable why your current listing agent may legitimately need an extension if you only signed a 90 day agreement with them.
The listing agreement was not long enough, statistically speaking, for your agent to have a realistic chance of selling the property.
Not to mention, the average ‘days on market’ for luxury apartments (north of $2-3m) and very unique properties (ground floor units, duplex, etc.) in NYC is often well north of 6 months.
In most cases, the inability to sell during the original listing term has a lot more to do with market conditions and the unique nature of your home as opposed to the competence (or incompetence) of your listing agent.
Your listing could simply be overpriced, in which case a price reduction with your current agent is probably more effective than hiring a new broker and sticking with an unrealistic asking price.
So if your agent has done a good job thus far, she or he might just legitimately need one extension in order to see it through and find a buyer.
If you decide to renew with your current broker, the listing will simply remain active. Nothing else really happens. The sale effort continues in earnest with your current real estate agent.
If, however, you’re dissatisfied with your listing agent, you probably won’t renew.
This means that your listing agent will need to completely delist your home at the time the agreement expires.
Please keep in mind that it usually takes 24 to 72 hours for listings to completely disappear from 3rd party websites and the MLS (i.e. the RLS in NYC) after a listing agent makes a status change.
We recommend being patient and refraining from harassing your agent, as there’s literally nothing your listing agent can do to expedite this process once she or he has already updated the listing status in the system. It simply takes time for 3rd party sites to refresh their listing data feeds. As we’ll explain in the next section, it’s important to end on good terms with your listing agent.
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Keep in mind that the expiration of a listing agreement doesn’t necessarily signify the end of the dialogue with your current listing agent. This is because virtually all listing agreements in NYC contain ‘protected buyer’ language.
This fairly standard clause in a listing agreement allows the current listing agent to submit to you a handful of names of prospective purchasers. If one of these prospective purchasers signs a contract to buy the property within a certain number of days after the expiration of the listing agreement, the listing agent is eligible for commission.
Here is an example of protected buyer language commonly seen in a NYC listing agreement:
Let’s review the last paragraph of the language above. What this means is that if you hire a new listing agent within 90 days of the expiration of your previous listing agreement, you agree to tell the new agent about the existence of a protected buyer list. It is imperative that your new broker excludes these names from commission obligations in any new listing agreement which you sign.
If you fail to do this, you could potentially be on the hook for double commission if any one of those named buyers purchases your property. You’d literally have to pay 6% to the old broker, and 6% to the new broker! This mistake would make your seller closing costs anywhere between 14% and 16%!
That being said, it’s important to keep in mind that a protected buyer list is actually highly advantageous to you as a seller.
After all, why would you want to remove all motivation from your old broker if she or he is in touch with a few buyers who might legitimately buy your home?
Not to mention, the presence of the protected list may create healthy competition between your old broker and the new listing agent you’ve hired, meaning they’re both likely to work even harder to try and bring you offers as quickly as possible.
Here’s another question you might be asking: will my home show up as a new listing if I hire a new broker? What happens to my listing’s ‘day count’ if I sign a renewal listing agreement with my current broker? Does ‘day count’ even matter?
In the case of a renewal, your listing’s day count will continue and it certainly won’t reset to zero.
Whether or not your day count resets upon hiring a new listing agent depends on local MLS rules as well as the policies of online search portals where your listing appears.
For example, here in NYC, the Real Estate Board of New York mandates that a listing must be off-market for at least 90 days before being considered a new listing.
However, as of this filming, StreetEasy typically just resets the day count on a property whenever a seller hires a new listing agent, even if the 90-day waiting period has not elapsed, as required by the real estate board.
It’s also important not to obsess about your listing’s days on market. Even if you successfully reset your day count by hiring a new agent (or being off market for at least 90 days), many real estate search portals such as StreetEasy maintain a permanent record of your previous listings.
Therefore, any savvy buyer can easily look up your previous listings and calculate the true amount of time you’ve been on the market. The optics of a lower day count may generate some extra initial interest, but you’re not going to fool anyone who cares to do their own homework into thinking that your home is a brand new listing.