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Real Estate Listing Agreements
From Janet Wickell,Your Guide to Home Buying / Selling.
Listing Agreements Aren't all the Same
If you are selling your home, and plan to list it with a real estate agency, what type of listing contract will you sign? There are three primary types of listing agreements and each one offers a different level of service, rights, and responsibilities for both the real estate agent and the home seller.
Exclusive Right to Sell Listing Agreement
The Exclusive Right to Sell is the most commonly used listing contract. As its name implies, it gives the agency the exclusive right to sell your property. You pay a commission to the agency at closing no matter who buys the property, even if you find the buyer yourself.
If an agency other than the listing ageny sells the home, the listing agency typically splits its total commission with the second agency.
Exclusive Agency Agreement
The Exclusive Agency listing contract also gives a specific agency the right to market and sell the property, but with one big difference—the seller retains the right to sell the property without paying a commission if he sells it to a buyer who was not introduced to the property by the agency.
The listing agency shares its commission with another agency if the second agency brings a buyer.
Open Listing
In an open listing, no single agency has an exclusive on selling the property and the owner can sell it himself without paying a commission to anyone. A seller can sign an Open Listing with multiple agencies.
If the seller does pay a commission, it's to the selling agency only. No commissions would be shared in an Open Listing scenario.
Which Listing Contract is Best?
Many agencies will only offer you an Exclusive Right to Sell agreement because it protects their investment. Good real estate agencies spend a great deal of time and money to market and sell their listings. It isn't worthwhile for them to sign an Exclusive Agency agreement, because it leaves you with the option of selling the house yourself at any time during the listing period—even after their marketing efforts are in full swing.
There's also the question of which party truly introduced the buyer. Did the buyer come to you because she saw the agency's signs or advertising—and chose to bypass the agent? Sticking with an Exclusive Right to Sell solves that problem.
Many agencies will sign an Open Listing, but don't expect any type of marketing from them. If they have a buyer they think might be interested, they'll show it, but they won't spend time and money to push a property that's listed by multiple agencies.
As Seen on For Sale by Owner in Gainesville www.FSBOinGainesville.com