A non-binding, implied (or handshake) agreement pursuant to which a home seller verbally authorizes a real estate broker to show his/her property to interested and qualified buyers with the mutual understanding that if one of those buyers make an offer on the property and subsequently signs a contract of sale (or purchase agreement, if you like) and closes on the transaction, the home seller will pay the real estate broker the commission they mutually agreed upon. This type of listing contract and is used by home sellers who wish to sell their own home while working with several real estate agents.
This type of listing contract is pretty much the same as an open listing. It’s generally used by people trying to sell their own home and involving an agent for the home showings. The listing contract identifies the potential buyer and guarantees the agent a commission if that buyer buys the home. Just like open listings, this type lacks concerted marketing efforts and can cause an inexperience home seller to get into a sales contract with a buyer who may not qualify for a real estate loan to complete the purchase.
Exclusive Agency Listing
The terms of this type of listing contract is implemented pursuant to a signed document and permits the seller to find a buyer using his/her own resources (e.g. paid advertising, yard signs, prospective buyer interviews, etc.), effect a sale of the property and close the transaction without obligation to pay the broker a commission. What the exclusive agency listing does not permit is another broker selling the property without a commission paid to the original broker. In the event another broker sells the property, the seller will be obligated to pay a full commission to both brokers.
Exclusive Right to Sell Listing
The most popular type of listing with sellers and brokers is the exclusive right to sell. This contract provides authorization for your broker to do whatever it takes to sell your house. For obvious reasons, this is probably the type of contract where you can expect the most incentive from the agent – a good marketing effort can take place here, and the homeowners’ work is much reduced.
Before you choose, always make sure you know every type of listing contract available to you. Keep in mind how much effort you would like to contribute to the home selling – this is often what distinguishes the listing types along with the amount of money you are willing to pay out for commission(s). Discuss the pros and cons of each type of listing contract. Remember, a listing contract is your first legal step in selling your house – take that step carefully.