Listing Agreements 101

There are 3 types of listing agreements that can be used: 1) Exclusive Right to Sell 2) Agency Exclusive 3) Open Listing.

An Exclusive Right to Sell contract means the seller has to pay a commission to the listing company no matter who secures the seller.  Unless, there are certain exceptions written into the listing contract.  It gives the listing company the most protection.  It is most likely the only listing contract any real estate agent will present to a seller.

An Agency Exclusive listing agreement means that as long as the listing is valid, if a real estate company (any company) finds a buyer, the listing company will earn the agreed upon commission.  Further, if company X is the company you listed with, but company Y finds the buyer and writes the purchase agreement, company X will be paid the fully agreed commission.  Then company X with split that commission with company Y as previously determined when the listing was added to the MLS.  If you didn't use a MLS company, the split would have been determined beforehand between the companies.  Here is the catch on this listing, if the owner secures a buyer, they do not have to pay a commission to the company that has it listed.  But they would have to find the buyer entirely on their own.  If they just refer a potential buyer to the listing company, they would still pay the commission.

An Open listing gives the seller the most flexibility.  They can accept as many open listings as they like from as many real estate companies as the like.  The seller only pays a commission to the company that actually secures the buyer.  A real estate company is unlikely to use this type of listing.  If they did, it is almost certain they would not spend any money advertising the property.  So instead of using this type of listing, it is almost better just to know the property is available.  Then if a company finds an interested buyer, first they get permission to show the property, then if the buyer likes the property and wants to move forward, the real estate company will ask the seller for a one-time listing agreement or ask the seller to sign a facilitators agreement so the company receive compensation if the deal closes.

That is how I wish to work with sellers.  I only want to know the property is for sale, the price and to see the various disclosures.  Sellers must disclose material facts about the property; they most also disclose the existence and location of wells and septic systems and whether any methamphetamine production has ever occurred on the property.  I can get you the necessary disclosures, you just need to fill them out and get them back to me.  I will scan them so they can be emailed to any potential buyers and make copies of the originals and send copies back to the sellers in case they need to give them to any potential buyers.