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In the realm of buying and selling real estate, there are multiple types of listing agreements. Because each of these implies its own definitions of responsibilities, services rendered and rights for sellers as well as agents, it is necessary for all involved to understand them fully. This is particularly true before any thought is given to actually signing on the dotted line and entering into a contract.
Type Of Real Estate Listing
Perhaps the most commonly seen type of real estate listing is that known as the exclusive right to sell. In essence, an agreement of this sort confers to the agency involved the full and exclusive right to sell the named property. Regardless of the eventual purchaser's identity, the seller pays a commission to the contracted agency upon closing. It should be remembered, of course, that if the purchaser is brought by a different agency, the commission is customarily shared between the listing agent and the buyer's agent.
A second type of listing agreement in the real estate context is that of exclusive agency. This type of contract also confers to a single agency the right to market and sell a property, but if the seller identifies a buyer on his or her own without the help of the agent, no commission needs to be paid to the contracted agent. Furthermore, if a different agency is responsible for bringing a buyer to the table, the listing agent will share the commission with that party.
It is also possible for a seller to enter into something called on open listing when the time comes to dispose of a piece of property. Such an agreement can be signed with multiple agents, and none of the agencies will have an exclusive right to sell the real estate. The seller is also able to identify its own buyer and avoid paying commission altogether. If a sale does result from the efforts of one of the contracted agencies, commission payment is made only to that agency and no sharing will occur.
Real Estate Agencies
There are real estate agencies committed to safeguarding the financial investment made in marketing listed properties. Thus, they tend only to enter into exclusive right to sell agreements. Such agencies dislike exclusive agency agreements, because if the seller finds a buyer during the contract period, no commission will be paid and marketing funds expended will not be recouped.
An exclusive right to sell agreement can be great for sellers who do not have the time or inclination to try to find buyers and who do not have a problem paying a commission at closing.
It is not unheard of for an agency to agree to an open listing, but it is unlikely that much if any marketing will be done. Such arrangements can work well if an agent already has a group of buyers in mind who are likely to be interested in the property.
All parties to possible real estate transactions would do well to obtain a full grasp of common listing agreements and how they work. To know more about us visit the website at https://3cre.com/commercial-real-estate-cincinnati-ohio/.