“Exclusive Agency Listing,” “Exclusive Right-to-Sell Listing” and the “Open Listing” are the basic categories for listing property agreements that are up for sale. The classification of listing that you choose will depend on the demographic of your area. Understand the terms of the listing regardless of what type you end up choosing. You should know how to cancel the contract if you have to, what happens when the contract finally expires, the listing duration and the particulars of the commission when it comes to selling this particular property.
What is the difference between an Exclusive Agency listing and an Exclusive Right-to-Sell listing?
In the Exclusive Agency listing contract the agency broker represents the owner of the property. If, at any time, the property owner wants to sell the home on their own, they have the right to do so. At the same time, the agency that is hired by the owner can use another agency to try and sell this property for the property owner. The second agency gets a commission and the listing agency gets a commission for holding the listing. What the Right-to-Sell listing means is that if the other agency sells the property, both agencies will get a commission paid by the seller. Yet, the difference in this is that, regardless of who sells the property, even if it is the owner, the owner also has to pay a commission. If there is an exception to this, it should be in writing and must also be added to the contract agreement.
Is it a better idea to have an Open Listing?
This might be the best option since it is a little more flexible, yet the owner has to take note of so many things when it comes to the selling of the home. What Open Listing means is that the owner can sell the property on their own, or they can use another outside agency to sell the property. If this happens, then the property owner only has to pay that agency the commission, or the agency who sells the property. The Open Listing simply means that this agreement is considered to be a non-exclusive agreement. This contract is one where the owner does not have to pay the listing and selling agency, they only pay the commission to the selling agency, providing a little financial relief to the property owner. The owner is not paying the broker to represent themselves, but to represent the buyer. The owner will not have to pay any fees to the broker if they find their own buyer. Agencies usually do not like this type of listing agreement.
What do I need to look for in a listing agreement?
The listing agreements can run for as short or as long as necessary – which, could be just four weeks or over a year. Make sure that you have a clear understanding of the agreement, most importantly the duration. The agencies requirements and the location of the property all make a difference on the commission that you are offering for selling this property. In most areas today with the economy the way it has been there are a lot more homes for sale than there are qualified buyers. Because of this, it may be a good idea to provide or offer a higher commission to the selling agent than what is normally offered. The agency that actually sells the property needs a higher commission as an incentive to push your property over some of the others in your area. You can split the commission however you want because it is your money. Remember, that by doing this, there will not be as much money provided to the listing agent. It is possible that the listing broker will not be the person who ends up selling your own property.
If, for any reason, you are unhappy with the actions of your listing agency, you might want to make sure that you can cancel if need be. Before you sign the contract, you might want to check this. The listing agency holds onto the names of the other interested parties, which means you have a right to those names should the contract expire. If the home does sell to one of these prospects you may still owe a commission so you will want proof that the buyer did originate from the listing broker.
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