Different Types Of Listing Agreements When Selling Through An Estate Agent

There has been tremendous growth in the real estate industry in the past couple of years. Perhaps that explains why property sales and purchases have become a major hype and especially on the internet. This just means that if you want to buy a new house or commercial business premises, you would easily get what you need today than the case was a couple of years ago. This is the same state of affairs that applies to property owners. Most of them are finding it much easier to find the right people to sell their houses and other property to.

When you are selling or buying a house, it is most often likely that you would have to seek the services of a real estate agent. Agents are simply individuals or businesses that have got an extensive knowledge of the property business in a particular part of the world. There are therefore the best suited to find you the rightful buyers if you are selling your property.

However, just like in any other business arrangements, there are many huddles that  you would have to go through whenever you are trying to find a suitable real estate agent. That is why you are always advised to ensure that you ask the agents as many questions as possible before signing any contracts with them. Knowing your agent well offers you confidence that your will get the best price and value for your property.

There are three main real estate listing agreements that apply today. These are;

  • Open listing agreement
  • Exclusive agency agreement
  • Exclusive right-to-sell agreementlisting

In these three options, there is nothing like one size fits all. The choice of any one among these three would depend on the prevailing real estate market condition. Again, the number of sales tasks that you can complete on your own is also an element to consider here.

Open Listing Agreement

These kinds of listing agreements normally put much emphasis on selling a home to the owner of property.  This is more of a non-exclusive kind of property listing service. In this arrangement, you as the seller are able to have open listings arrangements with different real estate agents. At the end of the day, you will only get to pay commission to the agent who brings forth an offer that you can accept.

Again, in this kind of an agreement, the seller has to pay about half of the fees that are associated with different listing agreements. This is because in such  a case, they are not represented by any one real estate agent.  Essentially, the home sellers are hiring agents to help them in finding potential buyers.

Another benefit that this agreement offers is that the seller can easily find the right buyer. As this happens, the seller would not have to pay any commissions to anyone. It is for this reason that many full- service agents do not like such kinds of agreements.

Exclusive Agency Agreement

The major difference that exists between open listings and exclusive agency agreement is that the agent represents the property or home seller. Much of the  listing is similar to that of open listing agreements.  This is because the seller has the right to sell property by their own. This means that they are under no obligation to pay any real estate agent commissions.

However, in that case where the seller seeks the services of estate agents, they would be able to bring in an aspect of networking. This is essentially achieved by working together with various real estate agencies so as to find a buyer who offers the right price. If in any case a third party agent finds a buyer with the best offer, the seller would have to pay a listing commission that is then shared between the two agents.

Exclusive Right-To-Sell Agreement

This is so far the most common of all kinds of real estate agreements. In such a case, the estate agent is given the main selling rights  and is able to make commissions by representing a property seller and finding the rightful buyer of property. This can be achieved by simply making sales through their estate agencies or by going through a network of agencies.

The seller in this instance pays a larger commission to the real estate agent. This is because they are actively involved in selling and representing the home. The owner of the home would not be allowed to sell the property without paying commissions. In this same agreement, the estate agent can offer a specific number of days for which the seller can give a contract with acquaintances without having to incur any commissions or fees.

Here are some other real estate conditions and contractual terms that you have to consider in these property sale agreements as well;

  • The length of the listing agreement is one of the most important aspects here. In most cases, the lengths are 30 days, 90 days, 6 months, a year or even longer.
  • The real estate agent selling commission fees rate is normally negotiable but a common ingredient in home sales agreements. These rates are likely to vary depending on a number of elements such as prevailing market conditions, location, supply and demand of housing in a region, size of the agency and to what particular extent the real estate agent is willing to market your home.
  • You also need to consider any potential cancelling of the real estate agreement.  There are some cases where you might be tricked to signing agreements that cannot be cancelled.  If the real estate agent you are dealing with is not willing to release you in the event that you are dissatisfied with the services they offer, it would be a good decision to find a different agent all together.
  • When you come across a real estate agent who allows you to cancel any engagement with them whenever you want to, you should be confident that you will get some great services from these people. Those who just want to lock you in might not be able to offer the kind of services you need and thus have to be avoided at all costs.

 

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