If you’re planning on putting your property on the market, chances are you’ve already started looking for an experienced real estate agent to help list and sell your home. Although it’s tempting to get a head start on the agent interviewing process, make sure you take the time to familiarize yourself with the following three most common types of real estate listing agreements:
- Exclusive right to sell listing
- Exclusive agency listing
- Open listing
If you need a quick refresh on an exclusive right to sell listing, read on for the answers to the six most frequently asked questions on the exclusive right to sell.
1. What is an exclusive right to sell?
An exclusive right to sell is a real estate listing agreement between the homeowner and the listing broker. When a home is sold under an exclusive right to sell agreement, the agent will automatically receive a sales commission, regardless of whether or not the agent had anything to do with closing the sale or contacting the buyer.
The structure of an exclusive right to sell agreement incentivizez the listing broker to do everything they can to sell your home before their exclusive right to sell contract expires. As long as an exclusive right to sell contract is active, the homeowner is only permitted to sell their property through a single listing broker.
2. What is an exclusive agency listing?
An exclusive agency listing is a modified version of an exclusive right to sell listing. In an exclusive agency listing, your agent has the sole right to sell your property for a given period of time.
In the event that your home is sold by another broker or via word of mouth, an agent with an exclusive agency listing is still entitled to a commission. However, if you, the homeowner, are personally responsible for the sale of your home, your agent is not entitled to receive a commission.
3. What is the difference between an exclusive agency listing and an exclusive right to sell?
In an exclusive agency listing, the agent in question has the exclusive right to list and sell your home for a pre-designated contract period. However, if the homeowner personally sells the property, they are not obligated to pay their agent a commission.
Comparatively, in an exclusive right to sell agreement, the listing broker will still receive a commission for sales that are closed and conducted by the homeowner.
4. Should I sign an exclusive right to sell listing?
Your decision to sign, or not to sign, an exclusive right to sell listing will likely depend on what role you want to have in the selling process. Remember, in an exclusive right to sell listing, the homeowner will almost always owe their agent a commission — even if the buyer discovered your home through your own marketing or social media posts. So, if you plan on placing online ads, putting up signs, or distributing flyers, there’s a good chance that an exclusive right to sell listing is not your best option.
However, if you would rather leave the marketing side of things to your agent, an exclusive right to sell listing will work in your favor. Not only will an exclusive right to sell listing allow you to spend your time and money on other aspects of the selling process, it also incentivizes your agent to focus their attention on selling your home before the exclusive listing contract expires.
5. Are you liable to pay commission to a real estate agent for a sale after the listing expires?
Under an exclusive right to sell contract, the seller is only liable to pay a commission if the sale takes place within the time period specified in the exclusive real estate agreement.
Some listing agreements include a provision stating that commission is still owed for sales that occur within 180 days of the listing expiration date. However, this condition will only apply if the agent can prove that the buyer started seriously considering the property during the time the listing was active.
6. How do I get out of an exclusive real estate contract?
Broadly speaking, there are three ways for a homeowner to get out of an exclusive real estate contract:
- They can ask their agent to voluntarily release them from the agreement.
- They can approach their real estate brokerage and request a new agent under a new contract.
- The homeowner can deliver a notice with legal grounds for contract cancellation. If this fails, the homeowner may need to pursue further arbitration or legal action in small claims court.
Want to Know More? Get in Touch with a Local Real Estate Agent
We get it, when it comes to agent listing contracts, especially complicated agreements like the exclusive right to sell, it can be tough to cut through the legal jargon. If you’re looking to put your home on the market and want an experienced real estate agent you can trust, reach out to Clever.
One of our friendly reps will be in touch to answer your questions and set up a free, no-obligation consultation with a full-service, local Clever Partner Agent.