Sellers have several real estate listing types they can pick from when they hire a broker to sell their property. The three most common listing types are open, exclusive agency, and exclusive right-to-sell. Let’s define each type and compare advantages and disadvantages.
Real Estate Listing Types: Open Listing
An Open Listing allows a seller to have agreements with as many brokers as they want, all at the same time, and pay a commission only to the broker who brings an acceptable offer. A seller may even find a buyer themselves and not pay a commission to any broker. This is the listing type most often used for pocket listings (listings not published on the MLS or elsewhere).
Advantages: An Open Listing allows the seller to find a buyer on their own without paying a commission.
Disadvantages: Many brokers either put little effort into marketing an Open Listing or ignore the opportunity completely since the likelihood of earning a commission is greatly reduced compared to other listing types.
Real Estate Listing Types: Exclusive Agency
Exclusive Agency agreements lock in the broker as the seller’s representative if an acceptable offer is received from another broker. However, the seller still retains the right to find their own buyer and not pay the broker a commission.
Advantages: Brokers with an Exclusive Agency agreement will put more effort into marketing the property than they would if it was Open Listing.
Disadvantages: Brokers still run the risk of losing their commission if the seller finds a buyer themselves, therefore they may not to implement their full marketing program.
Real Estate Listing Types: Exclusive Right-To-Sell
Exclusive-Right-To-Sell listings are the most common and lock in the listing broker as the sole representative of the seller for any type of offer received during the listing period. There can be exceptions made for buyers the seller has already shown the property to as long as those buyers are identified in the listing agreement.
Advantages: Brokers with this type of agreement are assured a commission if the property sells and will implement their full marketing program to produce acceptable offers.
Disadvantages: Sellers who have properties in high demand are locked into paying a broker commission, even if they find the buyer themselves.
Buyers should consider each listing type and choose the one that works best for them.
I hope you found this information regarding real estate listing types helpful. If you have questions about real estate listings or buy/sell/investment strategies, drop me a line! Contact Us