A listing contract is an agreement between you and a licensed real estate broker that authorizes the broker to represent you in the process of selling your home. There are several types of listing contracts, but very few of them are used. The most common one used is the “Exclusive Right to Sell.” You will find many more types, allowing you to choose the authorization level to give to your agent. Here are some of them:
Open Listing
Considered the most generally used, this type of contract is for people who want to sell their home and work with real estate agents. The contract gives agents the right to do showings of your home and gives them an amount of commission if the client chooses to buy your house. The good thing about free listing is that there is nothing exclusive or painfully bonding about them. The bad thing is that you can expect less marketing or advertising done.
One-Time Show
This type of listing contract is the same as an open listing. It’s generally used by people trying to sell their own home and involving an agent for the home showings. The listing contract identifies the potential buyer and guarantees the agent a commission if that buyer buys the home. Just like free listings, this type lacks marketing efforts.
Exclusive Agency Listing
During your home selling, you will find that different types of listing contracts involve many different people. This one involves a broker. An exclusive agency listing will give you the right to sell your own home without paying the broker any commission unless the house is sold through a licensed real estate professional. Should the house be sold without any help from agents, the contract allows homeowners to pay no commission at all. This type of listing contract is widely used because it is tempting not to pay your broker.
Exclusive Right to Sell Listing
The most popular type of listing with sellers and brokers, this contract gives the full right for your broker to do whatever it takes to sell your house. For obvious reasons, this is probably the type of contract where you can expect the most incentive from the agent. A reasonable marketing effort can occur here, and the homeowners’ work is much reduced.
Before choosing your contract, always know every listing contract available to you. Consider how much effort you would like to contribute to the home selling – this is often what distinguishes the types. Discuss the possibilities and disadvantages of each type. Remember, a listing contract is your first legal step in selling your house – take that step carefully.