If you have ever sold a home or are thinking of selling one, you will be presented with an exclusive right-to-sell agreement as that’s the most commonly seen in our industry. There are two other options available that you can consider and the complexity of your sale dictates which one his used.
Exclusive Right-to-sell listing
This is the most common listing agreement found in residential real estate. The agreement stipulates that the listing broker is hired to sell the subject property and introduce it to as many buyers as possible and to cooperate with organized real estate based on a commission set by the seller in the agreement. The seller is also obligated to pass any buyers interested in the property on to the listing agent and would be owed commission if they purchase. It’s important to note that this agreement doesn’t distinguish between a buyer that has walked off the street or known to the seller.
Exclusive Agency Listing
This type of agreement is more common in commercial real estate where sellers sign exclusive listing and allow agents to market and introduce the property to as many buyers as possible. The agents can share their commission and cooperate with organized real estate as well. This gives the option to the seller to market their property by agents that exclusively market certain types of properties or in a certain geographical area or demographic. I have three exclusive listings right now which helps my clients that don’t want to compete with offers get front of the line access and helps my sellers transact properties without creating a big fuss.
This is a new phenomenon in Toronto real estate where brokerages would list your property for a flat fee and offer services el a carte. This gives sellers the right to market their property themselves and using the mls to get their property exposure. The sellers can save commission as they would be representing them self and the option, if they wish, to cooperate with organized real estate.
Aside from the type of agreement you choose, there are other terms that are negotiable in the listing agreement which are as follows:
Length of listing agreement
Listing brokerage’s commission
Selling brokerage’s commission
Consent to be contacted if the listing expires by organized real estate.
Just like any agreement, you can also introduce any terms you’d like to be included in the agreement as well. Let’s say, you have been working with a neighbor for the past year and they might come to the table with an agreement; you can have them excluded from the listing agreement so you don’t have to pay commission on it.
It all boils down to what you communicate and negotiate with your listing agent.