Exclusive Right To Sell Agreement: How It Impacts Sellers

Exclusive right to sell agreement: How it impacts sellers

Let’s state something you probably already know, selling your home can cause tense situations. These factors can vary widely, but one of the largest tasks you will need to accomplish is to find the right real estate agent. 

Hiring the right realtor for your home is never a straightforward process. And it can be a costly one too because you may owe 6%  realtor commissions of the sale price on the home. 

This means if you’re planning on selling your home for $250,000, you’ll owe realtor commissions around $15,000, which is a sizable amount of cash. So, ensuring you select the right one is key. 

Also, we need to highlight the fact that the contractual agreements you enter into with a realtor can differ widely. But for now, we’re going to discuss the exclusive right to sell agreement, what it is, and what it means for the seller. 

What does exclusive right to sell mean? 

According to the NAR, the exclusive right to sell listing is defined as: 

“A contractual agreement under which the listing broker acts as the agent or as the legally recognized non-agency representative of the seller(s), and the seller(s) agrees to pay a commission to the listing broker, regardless of whether the property is sold through the efforts of the listing broker, the seller(s), or anyone else; and a contractual agreement under which the listing broker acts as the agent or as the legally recognized non-agency representative of the seller(s), and the seller(s) agrees to pay a commission to the listing broker regardless of whether the property is sold through the efforts of the listing broker, the seller(s), or anyone else, except that the seller(s) may name one or more individuals or entities as exemptions in the listing agreement and if the property is sold to any exempted individual or entity, the seller(s) is not obligated to pay a commission to the listing broker. (Amended 5/06)”

This means you agree that your realtor, with their support staff, or agency, will be the only ones to list your property. And that it won’t matter who sells the property, you are still liable to pay their commission. You will also not be able to enlist the help of another broker or agent once you’ve signed the agreement on the dotted line. 

There are slight variations to be mindful of. As always, make sure to study the fine print on any agreement you sign with a real estate agent or brokerage. 

One variation is giving an individual the exclusive right to sell, the other is giving it to a company. 

Exclusive agency listing vs. exclusive right to sell

There is a large difference between an exclusive listing Vs. the exclusive right to sell. 

With an exclusive agency listing, you’ve made the agreement with the agency and the broker. In this situation, if you find the buyer for your home, you owe the commission to both parties. 

With exclusive agency agreements, the realtor doesn’t get the commission if the seller is the one to find the buyer for the home. Which is a basic exclusive agency listing definition.  

Also with this type of agreement means the real estate agent will be keeping a close eye on all proceedings. The realtor will need to make sure that they are in contact with other brokers and buyers to ensure everything is clear for them to claim their commission. 

Unlike an exclusive right to sell agreement, an exclusive agency listing places the agent at risk of losing the payout. Which can mean they don’t get paid for the work they’ve put into selling the home. You can sign an exclusive contract with a real estate agent, which means you’re legally tied with the realtor, not the company. 

Now that we’ve defined exactly what the differences are, let’s talk pros and cons of selecting the exclusive right to sell or the exclusive agency listing. 

Exclusive right to sell 

As defined above with this contractual agreement, both the agency and real estate agent are paid if any buyer purchases your home. 

Pros

You are guaranteed a motivated agent. With most contracts, there is an expiration date. They will need to work quickly to ensure they are paid for the services rendered. 

This also means that the agent will make use of multiple listing services (MLS). They want to streamline the process and sell your home as efficiently as possible. Using this service will mean thousands of buyers and buying agents will see your home. 

Cons

There are always issues with clauses in contracts, thus the need to read and understand the fine print. This is especially true with the cancellation policy in this type of contract. If your relationship sours for any reason, you might not be able to opt-out and may need to wait out the contract. 

And the agent will still get the commission regardless of whether they found the buyer. While paying a commission is the norm in the industry, this isn’t the case with other contractual agreements. 

What are the pros and cons of an exclusive agency listing? 

Exclusive agency listing

With this agreement, you’ve entered into a contract with the agency that the realtor works for. If the agent can’t find a buyer, you’re not liable to pay their commission. Which is the first benefit.

Pros 

Another pro is that there is a potential to save money with this type of listing agreement. If you find the buyer, you can avoid paying the commission. Also, with this type of agreement you have far more control and can bring in other buyers. 

Cons 

With this type of agreement, you are not guaranteed a motivated agent. While they are professionals, it is nearly impossible to cover every angle. 

A less motivated realtor also means you’re bound to work harder on selling your home. You may need to assist the real estate agent and the opportunities as they’re not concentrating on.

But is there another option then being tied to one company listing your property or one agent selling it? 

An opening listing or For Sale By Owner (FSBO)

If you were looking at getting the most flexible agreement in place, the open listing option might be the route for you. 

This allows the seller to sell the home themselves for no commission, or as For Sale By Owner. Taking the FSBO route is a lot of work though. But the main benefit with an open listing is that you’re able to recruit as many agencies as you want. 

While this is guaranteed to widen your pool of potential buyers, the issue is that when you broaden your scope of focus, your marketing strategy starts to weaken. You will have to deal with multiple agents calling you. 

And if you do sell, you could start getting phone calls claiming a certain agent’s work sold the home. It can quickly become a confusing space to be in the middle of. Especially when multiple agents are trying to get your attention and book potential client viewings in your home. 

While an opening listing allows freedom, it also opens the doors for chaos! 

There is a simple way of avoiding tricky real estate contacts, multiple phone calls, and potential agent fights. Sell your house for cash to us. 

We make it simple. We will buy your home for cash! 

Rather avoid the potential headache of sifting through mountains of paperwork and call us at 855-659-3289, or you can use our online form to sell your home fast! 

Since we offer cash, there’s also little to no paperwork to deal with and little wait time – it’s lightning quick. And you don’t have to take our word for it, you can ask our customers. 

Once you’ve given us a call, you will receive an offer within 10 minutes. We can also guarantee there’s no need to work out commission fees, as you will get a fair cash offer and that’s it. 

If you accept the offer, you will be assigned a dedicated Real Estate Consultant who will organize a time to meet at your house, who will also bring along the paperwork to sign. House Buyers of America will handle all of the paperwork and we’ll do it quickly if you’re ready to sign on the dotted line. 

Then once you’ve signed the contract, you will see the cash in your account in a matter of days. And you’re done. Also, we’ll take your home “as-is”! Currently, House Buyers of America will buy homes in Washington DC, virginia house buyers, Maryland, and all throughout the Mid-Atlantic.

Avoid learning about the differences in exclusive right to sell agreements, and what it means for you. Just sell your home to us and get it done today!.