There are numerous forms of real estate listings available to an individual selling their property, all of which entail differing degrees of obligation and compensation on the part of the seller and any relevant agents or brokers. Method of listing is often the most important tactic used in selling real estate, as it is equivalent to advertising a product, with the product in this case, being the property.
The two key forms of listing are always entirely dependent on the manner in which one decides to sell their property, and is usually directly determinate to what part the seller desires for the real estate agent to play in the process. The two major forms of listing, with rare variation, are the open listing and the exclusive agency listing.
Open listings generally occur in a “for sale by owner” situation (FSBO), where an individual selling their property has decided to forgo the inclusion of a real estate agent, and opts instead It is entirely legal for an individual to act as an estate agent for their own real estate (the law in most states mandates a realtor’s license only when someone intends to represent another seller’s property.) While these situations are comparatively rare, they can be beneficial to individuals who want to sell their home and retain as much of the proceeds as possible-since by foregoing the use of a real estate agent the seller can save what is typically a five percent commission on the sale.
However, this means that the seller is ultimately responsible for all aspects of the sale, including negotiation of the sale price, performing background checks on potential buyers, and determining whether they have the means to actually purchase the property, and then seeing to it that all forms of transaction details, such as the appraisal and the inspection are completed. Also, it is often likely that the seller, especially in negotiating or attempting to close a sale, will often still have to deal with an agent on the buyer’s side. Also, unless the buyer is also self-represented, the seller will still have to part with at least a partial commission to the buyer’s agent, though it would in theory, be only half of what it would be if the individual was selling through their own agent.
The primary tool of the FSBO Open listings are also generally disliked by full service real estate agencies, and there have been anecdotal instances where agents will refuse to show open listing homes to their clients, for a variety of reasons, including professional loyalty, and the perception that an “amateur” seller will be difficult to agree with.
Exclusive agency listings occur when a seller opts to use a real estate agent to sell their property.
Multiple agency listings almost never happen, and are typically forbidden under real estate law as it restricts the potential for unethical behavior on agents placed in direct competition with one another. Though an exclusive agency listing provides an agent/agency with exclusive right to sell, the agreements are usually not difficult to break if the seller feels will be better represented elsewhere (or instead prefers to go with an open listing). Usually real estate agents simply want to be in a mutually beneficial relationship, often for the very practical reason of protecting their reputation and preventing any charges of ethical misconduct on their part.
Deciding which listing is the correct one is important decision for a seller. If the seller wants to make sure that the sale is executed exactly to their needs and specifications, wants to keep more of the overall proceeds of a sale, and does not mind the extra work and effort, that they may find “for sale by owner” and open listings right for them. In either case, the final decision in nearly all situations, remains with the seller. If you need legal advice and assistance, contact real estate lawyers.