When it comes to selling a home, people have certain expectations of their agent: putting together the listing paperwork; submitting it to the Multiple Listing Service; installing a "For Sale" sign; running some ads; and having open houses. They want their agent to tell them how much they can get for the home, how soon it will sell and present a marketing plan.

Two main functions

It is not surprising that sellers' questions and interest tend to focus on marketing, but this is only one of two main functions of a seller's agent. The other and, to me, more important question is seldom asked: how will my agent help me to protect myself from possible future problems? This is where a knowledgeable listing agent earns his or her commission.

Accurate pricing

Protection takes many forms. The first is by always telling a seller the truth, even if it is not what he or she wants to hear. Some sellers may want to "try" a high list price at the outset. An agent who knows the market and feels the list price should be lower protects the client by recommending the lower price.

It is in a seller's best interest to set the asking price close to the anticipated selling price. A sharply priced home has a much better chance of selling within the first two or three weeks than one that is not. Overpriced properties see few showings and fewer, if any, offers. Listing too high usually results in a longer time on the market and a lower selling price than pricing correctly from the start.

"Bring me a buyer"

Some sellers believe their agent will "bring them a buyer." This is true, but only indirectly. In most cases, the offer will come from another agent in the real estate network. The listing agent's knowledge of how to maximize the effectiveness of this network is an important factor in the marketing and selling process.

The majority of buyers are shown a home by an agent other than the listing salesperson. It is this other agent who will be writing the contract, not the seller's agent. At this crucial juncture, the seller needs protection. Once a contract is accepted and goes into escrow, the property is essentially off the market. If this sale later collapses, the seller could be harmed by the lost marketing time. The listing agent's job is to ask the selling agent the right questions about the qualifications and intentions of the buyer before the seller accepts the offer.

Verifying cash and credit

For instance, what is the source of the buyer's cash? There is always the possibility that the buyer does not actually have enough cash to close the escrow. He or she may be "hoping" to borrow from family, cash in a 401K, get an inheritance check, or sell stocks or mutual funds. When these undisclosed plans fall through and the transaction fails, the seller is left in the vulnerable position of having to re-market the property. It is also possible to find out too late that a buyer has had some "small" credit problems he forgot to mention. Unfortunately, lenders do not consider most credit problems "small."

No blank checks

A buyer may be expecting the seller to pay for any work the home may need, but a seller should never be in the position of signing a "blank check." Unless the purchase contract states clearly that all repairs are contingent on the seller's written approval, the seller may end up being obligated for unlimited expenses. The listing agent's knowledge of the appropriate contract language for the particular situation will protect the seller from unforeseen expenses.

Handling contingencies

Another consideration is the timely handling of contract contingencies. The purchase contract will generally contain buyer contingencies for, among other things, inspections and financing. I strongly recommend that a seller insist on requiring the buyer to remove these contingencies in writing. All contingencies must have a time deadline. A problem is in the making if the deadline passes without the contingency being removed. It is incumbent upon the seller's agent to follow up assiduously on these contingencies.

For example, there may be a contingency where the buyer must, in writing, substantiate the source of his or her down payment by a given date. Failure to do so by the deadline is a clear indication the buyer may not have the funds and that escrow may never close. If the sale is in the process of rescinding, it is far better to find out sooner rather than later.

Final thoughts

Regardless of how knowledgeable a seller may be, there are virtually hundreds of situations, large and small, where he needs to be protected, but may not realize it. Understanding what must be done and clearly explaining the options is the job of a professional Realtor. When you are a seller, you deserve no less.