If you’re trying to sell your home, then it is important to know about the different kinds of listings that are available to you. This way, you can make the best choice possible and sell your home quickly for a good price.
Here is everything you need to know about an exclusive agency listing:
What is an exclusive agency listing?
This type of listing is very common in the real estate industry. An exclusive agency listing is an agreement between a homeowner and a listing broker.
The National Association of Realtors defines the agreement as one that gives the broker the right to market and sell their home with one caveat. This caveat is that the owner also retains the right to sell their own home. It is kind of like an open listing agreement, however this time, the broker represents the seller in the transaction, not the buyer.
Although Realtors do not use exclusive agency listings that often, these types of listings are still totally legal and are even allowed to be included in MLS for maximum exposure.
Pros of an Exclusive Agency Listing
Sellers don’t use exclusive agency listings too often. Here is why:
The benefits of an exclusive agency listing are mostly for a person who would like to sell their home on their own. If they are having trouble bringing in buyers, then using this kind of listing gives them a safety net. This is because perhaps the broker will introduce a buyer into the situation that they could not.
But, if they are able to find a buyer on their own, then they do not have to pay the broker any commission for their time. This is different from an "exclusive right of sale" listing. In this type of listing, the agent gets a commission, no matter who introduces the buyer into the picture.
Agents might be willing to participate in an exclusive agency listing because it’s better than no listings at all. If the current market is slow, the possibility that a seller might need to pay a commission is tempting, even if it’s not a done deal.
However, most agents, particularly good ones, will only accept exclusive right of sale listings because of the commission guarantee that they provide.
Cons of an Exclusive Agency Listing
The cons of an exclusive agency listing are mostly for the Realtors who accept them.
This is because there is a possibility that they will put a lot of work into a listing only to have the owner of the home make the sale. If this ends up happening, then they will not get any commission.
To avoid this, many Realtors engage in something called excessive monitoring. When engaged in an exclusive agency listing, the Realtors would be in contact with other local brokers and homebuyers nearly constantly about the property. This way, when a buyer eventually comes forward, the Realtor has a “claim” to the commission because they had a hand in introducing the buyer into the deal.
Exclusive Agency vs. Exclusive Right To Sell
The difference between an exclusive agency listing and an exclusive right to sell are pretty easy to understand.
Basically, as mentioned, in an exclusive agency listing if the seller finds his own buyer while working with a Realtor, then he doesn’t actually have to pay the Realtor any commission. However, in an exclusive right to sell agreement, the Realtor earns a commission regardless of who finds the buyer.
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