Types of Listing Contracts
Types of Listing Contracts
- There are several different types of
listing contracts, but very few of them are used. The
"Exclusive Right to Sell" is the most common, but there
is the "open listing," the "exclusive agency listing,"
and the "one-time show."
Open Listing
- The "open listing" is mostly used by
people trying to sell their home by owner who are also
willing to work with real estate agents. Basically, it
gives a real estate agent the right to bring buyers
around to view your home. If their client buys your
home, the agent earns a commission. There is nothing
exclusive about an open listing and a home seller can
give out such listings to every agent who comes around.
- For that reason, no agent is going to
market your home or put it in the Multiple Listing
Service. If your home fits the criteria for one of their
clients, and it is convenient, they may be willing to
show it to their client. That is all an "open listing"
is good for.
One-Time Show
- A "one-time show" is similar to an
open listing in many respects, as it is most often used
by real estate agents who are showing a FSBO (for sale
by owner) to one of their clients. The home seller signs
the agreement, which identifies the potential buyer and
guarantees the agent a commission should that buyer
purchase the home. This prevents the buyer and seller
from negotiating directly later and trying to avoid
paying the agent’s commission.
- As with an open listing, agents will
not be spending money on marketing your home and it will
not be placed in the Multiple Listing System.
Exclusive Agency Listing
- An "exclusive agency" listing allows
an agent to list and market your home, guaranteeing them
a commission if the house sells through any real estate
agent or company. It also allows sellers to seek out
buyers on their own.
- This is not a popular type of listing
agreement. The reason is that there is not much
incentive for agents to spend money marketing your home.
If you come up with your own buyer, they have spent
money they cannot earn back through the real estate
commission. Plus, it is too easy for a greedy buyer to
go around the agent and negotiate directly with the
seller.
- If you find an agent willing to
accept such a listing, do not expect too much from them.
They will probably just place it in the Multiple Listing
Service and sit around to see if something happens. A
good agent would never accept such a listing, and you
probably want a good agent.
Exclusive Right to Sell
Giving a real estate agent the "exclusive right to sell"
your property does not mean that there will not be other
agents involved. Your agent is the listing agent and part of
his or her job is to market your home to other agents who
work with buyers. Those agents will show your home to their
clients. Regardless of who sells the home, even if you sell
it yourself to a friend at work, your listing agent will
earn a commission.
An exclusive right to sell is the only type of listing an
effective real estate agent will accept. This is because
they have a reasonable expectation of earning back any money
they spend on promoting and marketing your property.
