Working with a real estate agent has been shown to be the best way to get the highest possible price for your property. However, there are certain cases where sellers may want to sell their house privately even after having signed with a real estate agent. This may be because they are unhappy with the agent or managed to find a buyer offering a high price by themselves.
Such situations can be complicated depending on the terms mentioned in the contract you signed with your real estate agent. Knowing the type of listing agreement you have with an agent can help you determine how to proceed with selling your house privately.
Different Kinds of Listing Agreements
Open listings are most common in cases when a homeowner is trying to sell a house on their own. These are known as For Sale by Owner (FSBO) properties. Although the seller is attempting to find a buyer themselves, they may hedge their bets by having agents show the properties to buyers they’re working with.
Open listings don’t give the right to show or sell the home to any one party. If an open listing agreement is signed, it usually is done with a number of different agents. Agents are usually not open to signing this kind of listing agreement because they are not guaranteed any return for the work they do.
Exclusive Right to Sell Listing
An exclusive right to sell listing gives one agent the exclusive right to sell your property. There is usually a stipulated time period within which an agent must sell the home or the contract falls through.
This type of contract ensures that your listing agent will earn a commission on the sale no matter how it ends up happening. It also means that your listing agent is given full responsibility for listing your house on an MLS, marketing it, and interacting with interested buyers. For that reason, this is the most common kind of listing agreement that agents push for.
Exclusive Agency Listing
Homeowners who sign an exclusive agency listing are allowed to seek out buyers for their property on their own. But unlike an open listing, a single real estate broker represents the seller. The agent receives their cut only if they bring a buyer who purchases the property.
This kind of listing agreement clearly leaves the door open to sellers who want to find buyers themselves. If an agent does agree to sign an exclusive agency listing, that usually means they will list your home on the MLS and wait for offers to come in. They won’t actively market your home and organize showings like they would if they had an Exclusive Right to Sell contract.
Selling Privately After Hiring a Listing Agent
As is clear from the different kind of listing agreements, a seller’s ability to strike a deal with a buyer privately depends on the nature of the contract they have with a listing agent.
Open listings and exclusive agency listings give sellers a degree of leverage. If you have either one of those contracts signed with your agent, you should be able to sell your house to a buyer you found yourself. Things get a little more complicated if you have a different kind of listing agreement.
Exclusive right to sell listings guarantee agents a cut of the selling price when an offer for a house is accepted. It saves agents having to work for months while being uncertain of a payday. If you have issues with an agent after signing an exclusive right to sell contract, then you may have to seek legal recourse to avoid having to still pay them a commission.
How to Cancel a Listing Agreement
One reason you want to sell your house privately is you are unhappy with the service provided by your real estate agent. You have a few options in this case.
Most listing agreements contain a mediation and dispute clause. This clause basically states that the seller and agent will allow a trusted third party to play mediator in case there is a dispute between the two parties. This is beneficial to both agent and seller since legal action would be drawn out and cumbersome.
Legal recourse should be your last option if you are in any way unhappy with your real estate agent’s services. The best starting point is to talk directly to the agent and let them know what the cause for your dissatisfaction is. Most agents will be amenable to addressing your problems.
If that doesn’t work, you can escalate the problem to the agent’s real estate brokerage. Remember that your contract is between the brokerage and you, not with the specific real estate agent you were assigned. If you are unhappy with the service provided to you, you can request to work with a different real estate agent.
Always make sure that you know the exact terms mentioned in your listing agreement. It’s the language in that contract that will determine your ability to sell your house privately. The best way to avoid the harrowing process of canceling a contract with an agent or finding a different one is by hiring a great agent in the first place.
Clever vets the best real estate agents in the country so that home sellers can focus on getting a good deal for their property. Clever Partner Agents are full-service agents who work at lower commission rates than industry standards, saving sellers thousands of dollars in the process. You need to pay a commission only when your home sells, so you don’t have to worry about finding a buyer yourself at any point.
Connect with Clever to find a Partner Agent who can help you sell your house while charging just $3,000 or a 1% commission on homes over $350,000.