If you are thinking about selling your home, you will want to understand the paperwork that the agent will have you sign when you list your home. There are different kinds of listing agreements you may choose to have with an agent, and it is important to understand the differences so you will make the right decision for you.
Exclusive Right-to-Sell Listing. An exclusive right-to-sell listing is the most common listing type and the majority of real estate listings fall into this category. The listing agent has complete control of the transaction and so even if the seller, the listing agent or a cooperating selling agent finds an acceptable buyer, the listing agent will still earn the sales commission for the duration of the listing term.
Exclusive Agency Listing. An exclusive agency listing contracts one agent to sell the home. If that agent, or any other licensed cooperating agent finds an acceptable buyer, the seller must pay a sales commission. The owner still reserves the right to sell the property by themselves and thus avoid paying a commission. The broker is free to cooperate with another brokerage, meaning the second brokerage could bring an able buyer whose offer the owner accepts. Typically, the broker is paid a listing commission that is shared with the selling broker, so the owner pays both fees.
Open Listing. An open listing is almost like a “for sale by owner” listing. It is a non-exclusive agreement, which allows the owner to execute open listings with more than one real estate broker and pay only the broker who brings an able buyer whose offer the owner accepts. However, no commission is owed if the seller finds a buyer on his own, without any agent’s help. The open listing creates competition between the seller and agent(s) to find a willing buyer.
Multiple Listing Service. The multiple listing service (MLS) is not a listing type but is an important marketing tool for listing agents. This allows all the listing information as well as photos of the property to be shared online and is frequently syndicated to thousands of websites from here for maximum exposure.
Pocket Listing. A pocket listing is a variation of any of these listing types that doesn’t get placed in MLS. These listings may be marketed online by the listing agent but without going in MLS, they don’t get the same exposure as listings that do.
The listing agreement isn’t the only paperwork you will have to complete but it is an important piece. In most cases, you will need to fill out disclosures that share details about the home and the condition of the home. There may also be agency agreements that explain an agent’s obligations to you. The disclosures will be provided to interested buyers while your property is listed to give them more information about the home.
When you are listing your home, take time to read the paperwork and ask questions. In most cases, it is pretty straight forward and easy to understand. It is important to understand that a real estate listing contract is a legally binding agreement that outlines the rights and duties of the seller and the agent. Keep in mind that all listing contracts have expiration dates, so you aren’t committed to an agent forever if something doesn’t work out. When you are ready to list your home, let me know and I will be happy to go through the paperwork with you and answer any questions you may have, help you to find your dream home and/or determine the value of your existing property.
Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.