What is an open listing agreement?
An open listing is a non-exclusive contract between a seller and a real estate agent (or several agents). It stipulates that the seller will pay a real estate agent commission if the agent introduces them to a buyer who ultimately closes on the home.
Unlike other listing agreements, an open listing lets the seller retain the right to pursue a for sale by owner (FSBO) transaction. If the seller finds a buyer who closes, they won’t have to pay a listing agent a commission.
In practice, a FSBO seller may sign multiple open listing agreements with different agents as a low-risk way to attract more prospective buyers for their home.
Open listings help FSBO sellers market their homes
One of the biggest challenges for FSBO sellers is connecting with qualified buyers — and open listings can help you do just that.
When you sign an open listing agreement with an agent, they’ll actively look for buyers whose criteria match your home in the hope that their connection will lead to a commission.
Local agents are ideally positioned to help sellers find a motivated buyer and close fast because of their connection to other agents working with buyers. Nearly 90% of home buyers work with real estate agents.[1]
That means an agent can connect you to far more potential buyers than you could typically reach on your own. In fact, nearly one-third of buyers (29%) find their home directly from their agent — compared to just 2% of buyers who discover their home directly from the seller.[2]
Why FSBO sellers should consider covering the buyer’s agent feeThe buyer’s agent commission is typically 2–3% of the sale price. For a home that sells at $400,000, that translates to $8,000–12,000.It's standard practice for the sellers to cover the buyer's agent commission. Many buyers can't afford to pay their agent out of pocket on top of the down payment and other costs. Offering to cover the buyer's agent fee is an investment — but it can increase your pool of potential buyers and help you sell faster. However, you're under no obligation to cover it. Following the recent NAR lawsuit settlement, the buyer’s agent commission is now negotiated between the buyer and their agent in their contract, rather than set by the seller in their MLS listing. While this could change the standard practice in the future, most sellers are still offering to cover the fee (often through a concession) to attract more buyers. |
Key benefits of open listings for FSBO sellers
Open listings are non-exclusive
You can sign open listing agreements with multiple agents, which increases your home’s visibility at zero upfront cost or additional time commitment.
You only pay if and when an agent’s buyer closes on the home
Unlike some other FSBO marketing tactics — namely flat fee MLS services, which charge a flat fee upfront for a limited set of services — agents will proactively pitch your home to motivated buyers at no out-of-pocket cost to you.
You retain the right to sell FSBO
You only pay an agent’s commission if they bring the buyer who ultimately closes on the home. If you find your own buyer, you can avoid paying realtor commissions entirely.
What you won’t get from an open listing agreement
When you sign an open listing agreement, the agent is not agreeing to represent you in the transaction.
Open listings simply stipulate payment terms if the agent finds your eventual buyer.
In other words, the agent will be solely supporting their client and looking out for their interests in the sale. You will still have to manage your side of the transaction and look out for your own interests, as is the case with any FSBO sale.
Example: Open listing agreement
As with any legally binding contract, you should carefully review the terms of an open listing agreement before signing.
The terms of your open listing agreement will define your relationship with each agent:
These terms will cover all the basics, including:
- Details about your property (e.g., address, listing price)
- When the contract begins and ends
- The agent’s commission rate
- When you’ll be obligated to pay commission
The contract should also note that your relationship with any given agent is non-exclusive:
This means you’re free to enter as many open listing agreements as you please, or find a buyer yourself, without facing legal repercussions.
Common clauses in open listing agreements
- Cancellation: Establishes a procedure for terminating the contract.
- Criteria for screening offers: Outlines specific requirements for screening buyers, including things like a minimum offer price or deposit, closing timeline, or contingencies.
- Dual agency: If your state allows dual or designated agency, it might be mentioned in your contract. If you plan to sell FSBO, just make sure you’re not agreeing to dual agency, in which the buyer’s agent would represent you.
- Fair housing compliance: Under federal law, neither the seller nor the agent can discriminate against potential buyers based on their race, color, creed, religion, sex, national origin, handicap, or familial status.
- Listing price: The price you’re asking for, based on your home’s condition and similar properties in the area.
- Non-exclusivity: Allows you to sign open listing agreements with other agents or find your own buyer.
- Payment terms: The commission structure and rate/fee to be paid if the agent introduces you to the buyer who ultimately purchases your home; note that this could be a percentage of the sale price, a flat fee, or an hourly or retainer rate.
- Permission to market on your behalf: Allows the agent to market and show your home, possibly including a lockbox or yard sign.
- Seller’s disclosures: Required disclosures vary by location, but typically include material defects and any potential financial issues that would impact the sale, such as bankruptcy, back taxes, or loan defaults.
- Timeline: A fill-in-the-blank section that defines when your contract begins and ends; most listing agreements last three to six months.
Backing out of an open listing
When you sign an open listing agreement with an agent, you’re only obligated to pay commission if you accept an offer from their buyer — so you probably won’t need to terminate the contract.
The most important thing to remember is that open listing agreements are legally binding. That means you can’t try to back out while secretly working with a buyer behind their agent’s back.
Doing so would open you up to a world of legal trouble, including the possibility of a lawsuit.
Still, your open listing agreement should include a clause about cancellation:
Typically, canceling your open listing agreement will need to happen in writing.
If you decide not to sell FSBO and opt to proceed with an agent, signing an exclusive contract may render your open listing agreements null and void. Be sure to check the fine print!
Alternatives for FSBO sellers
Use a flat fee MLS service
Even if you sign an open listing agreement (or several), it’s still a good idea to list your home on the multiple listing service (MLS) — the database that agents rely on to scout homes for their clients.
Popular home search websites such as Zillow and Realtor.com pull listings from the MLS, so it’s one of the best ways to market your property.
Only licensed real estate agents can list homes on the MLS, so FSBO sellers need to enlist someone to do this on their behalf. Flat fee MLS companies offer an affordable solution.
These companies charge a set fee — usually $100–500 — which is far less expensive than hiring a full-service real estate agent. They'll list your home on the MLS, but you'll still be on your own for everything else, like pricing your home, negotiating with buyers, and figuring out paperwork.
Work with a low-commission agent
Low-commission agents offer full-service representation at a fraction of the traditional 2.5–3% listing fee, often charging as little as 1.5%. You’ll still save thousands on commission, but unlike selling FSBO, you’ll also benefit from an agent’s expertise in pricing, marketing, and negotiating — all of which can lead to a higher sale price.
That difference matters. FSBO homes sell for $55,000 less on average compared to homes sold with an agent. Even after paying a reduced commission, you'll likely walk away with more money overall than if you sold FSBO for less and skipped the listing fee entirely.
If you want the best of both worlds — a maximized sale price and major commission savings — Clever Real Estate can connect you with top-rated local agents who charge only 1.5%. Just answer a few simple questions, and we'll send agent matches straight to your inbox.
- FSBO listings sell for 13% less on average vs. agent-assisted sales
- Clever lets you list with top local realtors for just 1.5% at closing
- Get full in-person representation, showings, pro photos, and more
