Your house will probably sell in this market no matter its condition, but it’s wise to consider renovating.
What is an exclusive listing?
Exclusive listing is when a property owner enters into a legal agreement with a brokerage and its designated agent to market the sale of a property within a given time frame. In an exclusive listing agreement, the property owner maintains the right to sell his property without the obligation to pay the realty agent’s commission.
Entering an exclusive listing agreement is choosing not to have different brokerages and agents try to sell your property. It makes selling your property simpler in that you refer all prospective buyers to just one brokerage and the agent it represents.
There are two types of exclusive listing agreements:
- Exclusive right-to-sell. This is when the seller agrees to pay the listing agent, even if the property is sold through the efforts of the listing broker, the seller or someone else.
- Exclusive agency. With this agreement, the seller agrees to pay the listing agent if the house is sold through the efforts of any realty broker. If the home sells because of the efforts of the seller, the seller does not have to pay the listing broker a commission.
It is wise to do your homework by properly conducting an interview and a background check on possible agents prior to entering an exclusive listing agreement. You may check on their industry reputation, experience, web presence and market awareness.
Exclusive listing was the norm before the multiple listing service, or MLS, was implemented. Although choosing the MLS system has several advantages, one being that you get to have more exposure for your property, some sellers still opt for exclusive listing because of the control they gain over who gets to check out their properties and the lower rate of commission given to the agent. Sellers who go this route also might think that listing agents will work harder if they get both sides of the commission, regardless of whether it is them or the owner who finds the buyer. From a Realtor’s perspective, an exclusive listing could mean less exposure for the property, fewer interested buyers and the risk of having the property sit on the market for a long time.
Exclusive listing example
A couple of empty nesters decide to sell their large, family home and sign an exclusive listing agreement with XYZ Realty for six months. XYZ Realty now has the exclusive right to market and advertise the couple’s property, conduct open houses and sell it. The couple feel that the agreement will streamline the sale of their house and motivate XYZ Realty to work hard because the listing is exclusive to the agency. Within four months, XYZ Realty finds a buyer. The company collects the entire 6 percent commission at closing.
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