Once you’re ready to sell your house, you’ll have to consider the different types of listing options when working with a real estate agent. A popular option to consider is the exclusive right to sell. This type of listing is essentially an agreement between a real estate agent or broker and a seller that gives the former exclusive rights to market and sell your home. For the seller, this means he/she can’t hire another agent or broker while the agreement is in effect. Such an agreement also requires the seller to pay a commission to the real estate agent, irrespective of who finally sells the property, as long as the agreement is in place.
When selling your home, you should almost always have the property listed on the MLS (multiple listing service) as you’ll find most of your potential buyers there. Since an exclusive right to sell listing is permissible on the MLS, you won’t have to worry about missing potential customers via such listings.
Exclusive right to sell vs. exclusive agency – what’s the difference?
While the former gives the agent/broker an assurance of getting a commission, no matter whether they or the owners end up selling the property, no such guarantee is there with an exclusive agency agreement. When you have an exclusive agency agreement in place, the broker/agent won’t get a commission if the seller finds a buyer for his/her property and completes the process of closing the deal. However, a lot of monitoring is needed from the agents’/brokers’ end when there’s an exclusive agency listing. This involves managing things like contact with other brokers/agents and buyers to ensure with clarity that the sale of the home occurred with their help. There’s a lot of financial risk for the agents/brokers who have an exclusive agency because despite investing a lot of resources, time, and effort to sell a home, they could end up not getting paid even a dime for it. This alone is the reason why a majority of agents disagree to sign an exclusive agency agreement.
Important details to focus upon
Before signing the exclusive right to sell agreement with your real estate agent/broker, you need to discuss certain things featuring in your contract.
- The agreement’s duration
Know for sure how long the exclusive right to sell agreement will last. That’s because if the agreement is in place and you sell your own home (without any help from the agent/broker), you’ll still have to pay their commission.
- Other financial obligations
Apart from the agent’s/broker’s commission, remember to consider other potential costs too like repairs/renovations you’ve made before listing your house, closing costs, payments for property tax/transfer tax/capital gains tax, or even expenses incurred for fulfilling any elements of a conditional offer. Being guided by an experienced agent would surely speed up the process and help you bargain better on contractual contingencies.
- Cancellation rights of the contract
Understand the situations clearly under which your contract could be canceled. Get answers to what happens if your potential buyer fails to get financing, or if there’re problems with the home during its title search/inspection/appraisal and the buyer cancels the contract, etc. Know what your recourse, if any, would be if the buyer just decides to quit.
Other listing agreements to consider
In case an exclusive agency listing or an exclusive right to sell doesn’t fit your requirements, you don’t need to worry as there’re some other options that you may consider. These include open listing, net listing, and multiple listing service (MLS).