For those who are ready to take a look at listing agreements, there's a good chance that you've already done quite a bit of research. For many, it will include meeting with a realtor and having a detailed discussion about what your goals and needs are. For others, they've decided to bypass the realtor and list their home for sale by owner. Either way, it is important that you understand the different types of listing agreements available to help you to sell your home.
The Open Listing:
For the individual who hopes to do the home for sale by owner, the open listing may be the best option. It allows the owner to handle all of the details of the sale on her own. This type of listing will help the owner to cut back on some of the costs of selling a home. As a non-exclusive agreement, they are free to open up the listing to a number of brokers but will only have to pay the commission to the one broker who brings them a buyer. Better yet, if the owner finds the buyer on her own, then she doesn't have to pay any commission at all.
Exclusive Agency Listing:
With the exclusive agency listing, you have a broker who represents the owner. However, in this type of listing, owners may still have the option to seek out a buyer on their own and sell the property themselves. If that happens there is no commission to be paid. On the other hand, the broker is free to work with another broker as well. If he is able to find a viable buyer, then he will have earned his commission. In these cases, the broker may be paid a listing commission that he will have to split with the selling broker, leaving the owner to pay both fees.
Exclusive Right to Sell Listing:
With the exclusive right to sell listing, the broker is given exclusive rights to represent the owner in selling the property. He can do this by locating a viable buyer on his own, or enlisting the aid of another broker if need be. The owner does not have the freedom to sell the property herself and will have to pay a commission when the property sells unless there is an exception included in the contract.
Exception to the Contract:
The final listing agreement involves the exception to the contract. If a third party has expressed an interest in purchasing your home, the contract will give the broker a specified number of days to get that particular person to sign a contract without having to pay a commission. If that fails, when the property does sell later, the owner may be expected to pay.
Selling a house is a complicated process. Whether you have a home for sale by owner, or you plan to hire a broker to do the job for you, there are certain details that you need to fully understand before you choose the type of listing you want to use to sell your home.