An exclusive listing is when just one real estate agent or broker is allowed to market a property, show it to prospective buyers, and sell the property (if the owner agrees). This happens when a seller signs an exclusive agreement with the agent and agrees that no other listing agent will market their property and has the right to earn a commission.
Exclusive listings are of two types. One is more beneficial for the seller, and the other is better for the agent. Both are legally binding contracts that define and outline the rights and responsibilities of sellers and agents. These contracts/agreements are usually good for three to six months, and the agent has to sell (or be in contract with the property) within this time frame to earn their commission.
Exclusive listings are not just for selling your home. Even if you are renting out your property through an agent in NYC, you can sign an exclusive listing contract with them so only they can bring you, potential renters.
An exclusive right-to-sell is an agreement between the seller and the agent that promises the commission to the agent, even if the seller finds the buyer themselves. This agreement is better for the agent, and it also motivates them the most to find a buyer.
An exclusive agency listing is an agreement between the seller and the agent that gives the agent exclusive rights to market the property (no other listing agent will be allowed to show the property to buyers), but if the buyer finds a seller without the help of the agent, they wouldn’t have to pay the commission.
This agreement is better for the owner since it allows them to save on commission if they can find a buyer themselves. That’s why very few agents agree to this type of exclusive listing agreement. It’s also discouraging for the agents because they might invest a lot of time, effort, and money in marketing your property and still not get the commission if you (the seller) find a buyer on your own.
Exclusive vs. Open Listing?
You can also get into the third kind of agreement with a real estate broker or multiple brokers at once. It’s called an open listing, and it allows any listing agent (if they have your permission to market your property) to try and bring you a buyer and get the commission if you sell to their buyer.
This might be beneficial for you as a seller because, with multiple agents working on your listing, you can connect with more potential buyers and will have more options. But it’s not a good deal for the agent(s) because they cannot be sure whether their time and effort (in marketing and showing your property) will earn them the commission.
What Are The Benefits Of An Exclusive Listing For Sellers And Agents?
A real estate agent has to make a lot of effort and invest a lot of time (and money) in marketing a property. They have to create and update a listing, market it on multiple digital platforms (like social media), and take potential buyers to visit the property (the time investment). They want to ensure that all their efforts will pay off.
Therefore, they prefer an exclusive right-to-sell listing contract which promises them the commission if they (or you) can sell the property within the time limit of the contract. The exclusive agency listing contract is the next best option because they don’t have to compete with other brokers for commission, and with their contacts and experience, they have a much better chance of finding the buyer than you (the seller).
Most listings in NYC are exclusive, so for sellers, there is little choice in the matter. But an exclusive listing benefits the sellers as well. They can leave the task of finding buyers to their agent and can be sure that the agent will do everything they can to sell the property within the exclusive listing time limit to earn their commission. So they will try and sell it as soon as possible.
Also, an exclusive listing can keep things simple. There will be just one agent handling all the potential buyers, showing the property, and helping you negotiate with buyers. With an open listing, you may have to meet with multiple agents and keep track of buyers coming from multiple sources.
What Do Buyers Need To Know About Exclusive Listings In NYC?
As a buyer, you have the right to find and work with your own agent, and if your agent takes you to an exclusive listing, the listing agent (or seller’s agent) will have to split the commission with your agent. So an exclusive listing doesn’t affect your buying process.
The benefit of exclusive listings for you as a buyer would be less confusion. Such properties will only be listed with one agent, and you and your agent won’t have to go through multiple listing agents (which will be the case with an open listing) to figure out which one to work with.