Most people are familiar with regular listing contracts homeowners use with real estate agents when selling their homes, but there are multiple types of listing contracts you can use. If you are planning on selling your home soon, here are some of the key differences between two common types of listing agreements.
The most preferred type of listing with real estate agents is an exclusive listing, which allows any real estate agent to show the house and sell it. The listing agent will get a commission if the house sells, but any other agent involved in the sale will also receive a percentage of the commission. With an exclusive listing, you cannot avoid the commission on the sale. In other words, if you find a buyer for the house, you will still pay the full commission.
With an open listing, you are only required to pay a real estate agent a commission if the agent finds the buyer. In other words, you pay nothing if you find your own buyer.
A second difference with these two options is the effectiveness each offers. When you sign an exclusive selling listing with a real estate agent, the agent has a huge incentive to market your home and locate a buyer for it. The agent will make a higher commission if he or she lists a home and finds a buyer for it. The agent will make a smaller commission if another agent finds the buyer. Because of the way commissions work, agents have more of an incentive to locate buyers when there are exclusive listing agreements in place.
With an open listing, you ultimately are responsible for marketing and selling your home. While agents might help you, there is not as much of a chance they will try to find buyers for your home. It can be hard to find buyers when selling a house by owner. While you will save money by not having to pay a commission if you do find a buyer, you might find it almost impossible to find a buyer. Once you do, you may also experience difficulties trying to negotiate and close on the sale.
When it comes to these two options, it is usually better to let a real estate agent sell your house for you. Agents are experienced with this and they know what to do. If you need help or would like to list your home, call an agent today.Share