Posted: under Real Estate.
Tags: contract for sale, for sale by owner contracts, FSBO real estate contract, listing agreements, listing contracts, Real estate contracts, real estate listing agreements
This past week, I had 2 clients asking me questions about the differences between listing contracts. So as usual, I try to explain in a post here, on my blog and refer them the link.
There are 3 different Real Estate listings contracts:
Exclusive Right to Sell Listing
This is by far the most common kind of listing between sellers and brokers.
Under a exclusive right to sell listing contract, the broker is the only one authorized to sell your house. If another agent finds a buyer, your broker earns a commission. When you find a buyer on your own, your broker still earns a commission. This arrangement gives your broker the most incentive to spend time, funds and energy advertising your residence, particularly to the other agents inside the region who can show your home to their buyer clients. Only with an exclusive right to sell agreement can you expect to get a full service marketing effort from your broker, since it is the only listing contract that assures a broker will get paid for his advertising expense and efforts when the property sells.
Exclusive Agency Listing
This is comparable to the right to sell listing, with the substantial distinction that you simply reserve the right to sell your residence your self and not pay the broker a commission. The broker only gets paid if your house is sold through a licensed real estate professional. If you uncover your own buyer and sell the home your self, you pay no commission. On the face of it, this may sound like an attractive arrangement. Nonetheless, it’s not a well-liked listing kind with brokers for a very great reason. Under an exclusive agency agreement, the broker is exposed to the risk of putting forth considerable effort and expense advertising your residence, only to come away empty handed. The attraction to the seller for this type of contract is the possibility of discovering their own buyer and not paying a commission. This puts the seller and broker in competitive roles, which commonly is not inside the ideal interest of either party. Since the broker stands a great chance of not reaping any reward, it’s unlikely that any effort or expense might be put into advertising an exclusive agency listing.
One Time Showing Agreement
This is an agreement whereby a For Sale By Owner agrees to let an agent show the property to an interested Buyer and then pays a commission to the Broker if the showing outcomes in a sale. The purpose of this agreement is to stop the seller from dealing directly with a Buyer that a broker introduced to the property so that you can keep away from paying any commission. Again this type of agreement offers pretty small incentive to a broker to bring buyers to your property.
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Comments (0) Nov 30 2010