- If you choose the right realtor, an exclusive right to sell agreement can be the best way to sell your house, brokers here say. If you don't get the service you deserve under this exclusive arrangement, you have the right to terminate the agreement.
Broker Paul Brennan of Prudential Douglas Elliman. Images courtesy of brokers
"I've been doing this for about 15 years and I would only do an exclusive; I would never do an open listing - an open listing will languish on the market," said Cee Scott Brown
, senior vice president and associate broker for The Corcoran Group
. The house will languish on the market because no one broker is representing it, he said.
There are three basic types of listing agreements, according to brokers. The open listing, the exclusive agency and the exclusive right to sell.
1. An Open listing can be given to one or more brokers at the same time. Any one of these brokers can sell the property and earn the commission. If the owner of the property sells the property he does not pay anyone a commission. A termination date is not required and the broker is not obligated to search for a buyer under this contract. If the property is sold it will terminate the listing with other brokers.
2. An Exclusive Agency Listing gives one broker the listing for a specific period of time. The owner of the property can not hire another broker but does retain the right to sell the property him or herself without paying a commission to the broker.
3. An Exclusive Right to Sell Listing gives one broker the sole and exclusive right to sell the property. The contract is for a specific length of time. If the owner sells the property he or she is obligated to pay a commission to the broker. If another broker from another agency sells the property, he or she splits the commission with the listing broker.
Broker Cee Scott Brown of The Corcoran Group.
If it seems at first glance that the exclusive right to sell listing benefits the broker the most, stop and think that if the broker is really motivated to sell your property the way he or she might be under this kind of listing, they'll do a better job for you, according to brokers.
And a broker with this listing is obligated to market your home energetically and completely.
"The broker who I engage is in effect managing the listing for me," explained John Viteritti
, a licensed real estate broker, lecturer and consultant to the real estate industry. "They engage the services of all the other brokers and personally do all the advertising, marketing and open houses. Through open houses, they alert the other brokers in the community." In short, that broker is the point person you rely on to get the house sold.
"But you have to choose a broker who will do the job completely for you, not one who is all about 'smoke and mirrors,'" said Paul Brennan
, a long-time broker with Prudential Douglas Elliman
"One of the benefits for having an exclusive with someone who is experienced like I am is getting your house ready for sale from the ground up," he said. "If the owner wants to put a pool placement on the property or if they want to go up a story or expand out, all of these things come into play. It's my job to find out what can and cannot be done with the property and the structures. As your broker, I'm in charge of all due diligence. I must position the property so that every question is answered from a zoning perspective. Because I have the exclusive, I would have to spend the money to find these things out, because it helps me and it helps you. And all this work should be done before the property even goes on the market. With an exclusive, a broker has to ask themselves what value adds are you giving to the owner?" continued Brennan.
Real Estate consultant John Viteritti.
's Brown said, if an agent doesn't think he can sell a house, he shouldn't take the exclusive listing. "I only take on houses that fit in our portfolio. If I check out a house, I may get back to the person and say it's not a good fit," he said.
Brown further stated "In all the listings we have, we have a copasetic relationship with the client. It feels comfortable. If you are working with capable brokers, it should be that way. Otherwise, you should terminate the agreement."
A seller can terminate an exclusive contract at any time an agent is not providing the service," said Viteritti. "In the same way you can pick the wrong doctor, wrong lawyer, the wrong accountant, you may pick the wrong agent. So the answer then is to select from among the agents who are going to do the best job based on their knowledge and experience."