Exclusive right to sell is one of the most prominent real estate listing agreements: it essentially means that you’ve provided a specific real estate broker or agent with the exclusive rights to market and – eventually – sell your home.
If that sounds like you’ve potentially got a recipe for disaster at hand, you’ve got a good nose. Several serious problems can come up if this clause binds you.
Why is this such a big deal?
If you decide to work on marketing and selling your real estate with the help of an agency, you’ll soon discover that this particular listing agreement is a slam-dunk for most agents.
Signing it means that you will need to pay out a set commission to the assigned agent upon selling your home. Yes – even if you end up finding the buyer yourself. Even if the agent has absolutely nothing to do with the buyer, they’ll get the agreed-upon commission.
How does ‘Exclusive Agency Listing’ compare?
In practice, exclusive agency listing is far less cumbersome to deal with. For one, this agreement does not guarantee a payout for your agent, avoiding most of the issues you probably have with the titular topic.
Instead, this kind of listing states that the agency you’ve signed the contract with has an exclusive right to represent you on the market. If you bring in your buyer, though, you won’t need to pay your agent.
While more flexible for prospective real estate sellers, exclusive agency listing is not very interesting to agents themselves. Note that they may be less motivated to find a buyer under this clause.
What sort of problems could exclusive right lead to?
A particularly egregious example would be that your real estate agent could go on vacation and still profit off’ your sale after you did all the work yourself! Don’t forget: you can’t simply go out and hire another agent while the agreement is active – it’s legally binding.
You might not even have the opening to cancel this agreement until the clause expires!
In most cases, agent commissions will amount to about 5-6% of the agreed-upon selling price, so if you don’t feel like paying out such a substantial chunk of money no matter what, you may want to avoid this agreement.
How to tell if this agreement is present in my contract?
The specific phrase will be present in the listing agreement document you’ll get from your real estate agent or broker. Look for it in the Terms; Conditions section. As ever, it pays off to read the documents you’re about to sign carefully.
Is it always a hassle?
Not at all. If you’re looking for a very hands-off home selling experience, you’ll probably feel right at home under the exclusive right clause.
The chances are that your agent will also be highly motivated to move the real estate as quickly as possible. Don’t forget: they’re getting their money no matter what. Since the clause will expire at an agreed-upon date, they’ll want to do the job fast.
Agents will also often use the Multiple Listings Service to get as many eyes on your home as possible. A handy tool for prospective real estate sellers, for sure.
What other options do I have to sell my real estate?
You can always attempt to sell off-market but bear in mind that the full brunt of the work that goes into pitching a sale falls to you. Now that you know what’s up with the specific ‘exclusive right’ clause, you’ll be able to make an informed and sound decision.