Written by If you are selling your home, and have decided to use the assistance of a real estate agent, then congratulations. I always believe that using an agent is much better and financially sound than selling your property on your own. With that being said, there is a lot that is still your responsibility, most of which involves keeping yourself informed as to what steps the real estate agent is taking. One thing that you are going to have to sign is a listing agreement, a document that allows an agent to find a buyer for your home. There are different types of listing agreements, which have different pros and cons.
The exclusive right to sell is the most common one that I see in my every day business. This type of listing means that only a specific broker’s agency is allowed to sell your home, and you must pay the commission no matter what. The positive side of this is that agents are much more willing to take on properties with this type of listing agreement, and will generally be more willing to invest their own resources into selling your home, because they are scheduled to get a payment no matter who sells the house. The negative side is that you do not have the opportunity to avoid paying the commission by selling the property on your own.
The exclusive right to agency is basically the same as the exclusive right to sell, except the seller may avoid paying the commission should he or she sell the home prior to the listing agent. Needless to say, not many agents like this type of listing, because they are now competing with you as a seller. The positive side of this type of listing is that you can now do your own work to sell and earn more money once the home is sold. The draw back is that many quality agents will not accept this type of listing, and those who do often do not invest many of their own resources into selling the home, because their is no guarantee that they are going to see a commission at the end.
An open listing is an open agreement to sell your home, using the assistance of many different agencies, as well as your own efforts. You must pay commission to the first agency that produces a ready, willing, and able buyer. The pro of this listing type is that you have several different agencies exposing your property to their vast number of leads and prospects. The down side is that there are certain rules that can make this type of listing difficult, such as some multiple listing services that do not allow these types of listings.
As you can see, choosing a specific listing agreement depends on what it is that you plan on investing into the selling of your home, yourself. For instance, if you plan on being completely separated from the selling process, and want an agent to do the vast majority of the work, then an exclusive right to sell may be for you, etc. It all depends on your personal wants and needs in an agent.
