Exclusive Agreements provide maximum support and gives your REALTOR the desire to get your property sold at all costs. Why? Commitment.
There are two types of Exclusive Real Estate Listing Agreements:
1) EXCLUSIVE RIGHT TO SELL LISTING AGREEMENT
Probably 99 percent of real estate listings are this type, where there is 100% commitment between the Seller and the Listing Agent. This agreement ensures the Listing Agent that if the property sells during the listing period, the Listing Agent is to be paid a sales commission; whether the seller, the listing agent or a cooperating selling agent finds an acceptable buyer.
The Exclusive Listing Period:
In most markets, a 180-day exclusive right to sell agreement gives the experienced agent time to effectively market the property. If the listing expires and the agent is doing a poor job, the seller isn’t stuck with a bad agent. However, if the agent is doing a good job when the listing expires, the listing can be renewed.
The brokerage commissions for Exclusive Right to Sell Listing Agreements typically vary from 4.5% to 6% of the purchase price. The listing fees are negotiable between the Listing Agent and Seller and can increase or decrease based on several factors including but not limited to: Sale Price, Listing Price as it compares to Market Price and Dual Representation. This fee is then split with the agent who represents the buyer in the transaction.
Why Listing Fees may be more than 6%:
Depending on the demand of your property, the listing agent may spend several thousands of dollars to market your home, even if it doesn’t sell. The agents commissions typically go towards mass mailers, property photos/videos, magazine and premium online advertisements, open houses, insurance, etc. In some cases the listing fees can be reduced when a seller decides to pay for all of the upfront advertising aside from commissions.
Can I Cancel before the Term Ends?:
As with any Agreements, there are usually always cancellation clauses if you are not satisfied. Ask for a Cancellation of Listing Agreement from your agent if you’re unhappy with the service.
2) EXCLUSIVE AGENCY LISTING AGREEMENT
An Exclusive Agency Listing contracts one brokerage to sell the property. If that agent, or any other licensed cooperating agent finds an acceptable buyer, the seller must pay a sales commission. However, no sales commission is owed if the home seller finds a buyer on his/her own. Due to the lack of control over the outcome and less commitment on behalf of the seller; unless the seller pays for the upfront expenses or marketing efforts, most real estate agents are reluctant to work on an exclusive agency listing.