Definition
An Exclusive Right to Sell Listing is a type of real estate listing contract in which a property owner (seller) grants a single real estate broker the exclusive right to sell their property. Under this agreement, the broker is entitled to a commission if the property is sold during the term of the listing, regardless of who sells the property (whether it is sold by the broker, another broker, or the seller themselves).
Key Features
- Exclusive Representation: The broker is the exclusive representative for the seller.
- Commission Guarantee: The broker earns a commission if the property is sold during the term of the contract.
- Set Timeframe: The agreement is for a specified period.
- Broad Marketing: Encourages the broker to market the property aggressively, knowing that they will receive a commission upon sale.
Examples
- Home Sale: A homeowner signs an exclusive right to sell listing with a real estate broker. The broker aggressively markets the property and finds a buyer within two months. The broker earns a commission from the sale.
- Expired Listing: A property is listed with an exclusive right to sell arrangement that expires after 90 days. If the property is sold during this period, the broker earns a commission.
Frequently Asked Questions
What is the main advantage of an exclusive right to sell listing?
The main advantage is that it motivates the broker to market the property effectively because they are assured a commission if the property sells during the listing period.
Can the owner sell the property themselves under this agreement?
Yes, but even if the owner sells the property themselves, the broker still earns a commission.
How is this different from an exclusive agency listing?
In an exclusive agency listing, the owner has the right to sell the property themselves without paying a commission to the broker. However, if the broker or another agent sells the property, the commission is due.
What happens if the listing period expires without a sale?
If the listing period expires without a sale, the contract ends, and the broker is generally not entitled to a commission unless an extension or a new agreement is made.
Is it possible to cancel an exclusive right to sell listing?
It depends on the terms of the contract. Some agreements have a cancellation clause and others might require mutual consent to terminate.
Related Terms
- Exclusive Agency Listing: A listing agreement where the owner can sell the property themselves without paying a commission unless the broker or another agent finds the buyer.
- Open Listing: A non-exclusive agreement allowing multiple brokers to find a buyer; the broker who finds the buyer earns the commission.
- Net Listing: An agreement where the broker keeps any amount above a predetermined net price that the owner wants to receive from the sale.
References
Suggested Books
- “Your First Home: The Proven Path to Home Ownership” by Gary Keller
- “The Book on Investing in Real Estate with No (and Low) Money Down” by Brandon Turner
- “Real Estate Principles: A Value Approach” by David C. Ling and Wayne R. Archer
Fundamentals of Exclusive Right to Sell Listing: Real Estate Contracts Basics Quiz
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