Types of Listing Contracts
The second most important decision that you'll make regarding your realtor is the
type of listing contract that you'll sign. There are four major types of listing contracts,
each of them granting both you and the realtor specific rights. Read the information
below before agreeing to any Realtor listing so you will be better prepared to make an
Exclusive Right to Sell Listing
An exclusive right to sell listing contract is the most popular one with agents. Under
the terms of the agreement you sign, your real estate agent has the exclusive right to
sell your property. If another agent finds a buyer, your agent still gets a commission.
If you find a buyer yourself, your agent still gets a commission. Because your real
estate agent is guaranteed a commission regardless of who finds the buyer, he or she
will expend considerable energy showing your home, especially to other agents, who will
show it to their clients. In essence, you'll be employing the real estate agent and
everyone that they know or have contact with to get your house seen and sold. Since the
agent gets a commission no matter who finds a buyer for your house, you can expect full
service from advertising through advice with an exclusive right to sell contract.
Exclusive Agency Listing
A second exclusive arrangement is the exclusive agency listing. Similar to an exclusive
right to sell listing, the real estate agent you contract receives a commission if your
house is sold through any licensed real estate professional. Unlike a right to sell listing,
though, you reserve the right to find a buyer on your own without paying commission. This
is an attractive option for home owners that are interested in selling their home themselves,
but want access to multiple listing services. If your intent is to aggressively market your
home yourself, there are agents that specialize in exclusive agency listings. Since there's
a possibility that a real estate agent could expend a lot of effort and end up empty-handed
if you find your own buyer, they're not quite as motivated to market your home as if they
were guaranteed a commission.
An open listing grants the broker no rights other than to receive a commission if they
bring in a client who buys your house. It gives the real estate agent permission to bring
clients to view your house. If the viewing results in a sale, the agent gets a commission.
Since there's no promise of exclusivity, you can sign open listing agreements with as many
agents as you want. You'll generally pay less commission on an open listing, making it an
ideal arrangement for a motivated FSBO who is willing to pay a partial commission for access
to a realtor's clients. It will be up to you to do the lion's share of the marketing for
your house, including arranging and coordinating showings, fielding phone calls and making
arrangements for all the closing details.
One Time Listing Agreement
A one time listing, also known as a 'showing listing' is an agreement where an owner selling
his own home agrees to let an agent show the house once. The owner agrees to pay a commission
if the showing results in a sale.
Now that you understand your options, think about them carefully and consider which one
will benefit you the most.