What an exclusive agency listing and exclusive right to sell listing seller wanted to list their property but they were curious about this. So let’s just get right to it.
What is a Listing
A listing is an agreement between a broker and a seller in which the broker agrees to bring in a ready willing and able buyer.
That means that a buyer who’s coming in. At the asking price that the seller is asking or whatever the seller will accept once they get an offer.
The buyer has to be a real buyer who can actually afford the property and who can get a loan to get the property or whatever other terms the buyer comes in with.
In exchange for that all that work. The seller agrees to compensate the broker usually with a percentage of the sales price. That’s the listing.
Exclusive Right to Sell Listing
An exclusive right to sell listing affords a real estate broker the greatest feat protection. It is also the most commonly used type of employment.
Under an exclusive right to sell agreement, the owner relinquishes their right to list the property with other brokers.
Avoid payment of a fee by selling the property themselves or removing it from the market.
An owner of real estate grants a broker the right to locate a buyer for the property. Prior to the expiration of the period of employment specified in the listing agreement.
The fee is Earned When:
(1) The brokers entitled to the fee agreed to in the listing agreement. If during the listing period. The property is sold on any terms no matter who produces the buyer.
(2) the broker or their agent presents the seller with a bona fide offer from a ready willing and able buyer.
- on terms sought by the seller on the listing
- on other terms accepted by the seller
Exclusive right to sell listings give a broker and their agents the greatest incentive to work toward attaining the client’s goal of locating a buyer.
The sellers’ broker does not compete with the client to sell the property.
No they all work together to achieve the sale. But it doesn’t always work out. Sometimes plants misbehave and deals go south (that’s life).
What happens when a less-than-stellar seller attempts to terminate a broker’s employment. Without good cause prior to the expiration of the listing period.
Well while a seller may terminate the broker’s agency at any time. The seller cannot both terminate the agency during the listing period and avoid payment of a fee.
If termination of agency clause exists in the listing agreement.
The termination of agency clause on a listing agreement couple the permissible canceling of the listing with the obligation to pay a fee.
Well on cancellation the broker is deprived of the opportunity acquired in the listing to earn a fee. On a similar note when a seller by word or by conduct. Clearly indicates they no longer intend to sell the property.
The agent prepares a release and cancellation of an employment agreement form for the seller to review and sign.
The release and cancellation agreement may call for immediate payment of the full brokerage fee agreed to in the listing in exchange for mutually agreeing to cancel the listing agreement.
Alternatively, it may call for payment at a later date when the property is sold or placed again on the market with a specified time period after the date of the agreement.
Or a compromise might be the payment of a partial fee with the balance due if the property is sold during the cancellation period.
Basically the form is used for the broker and a client to reach a meeting of the minds a compromise and dictate the terms of a mutually agreeable termination.
Notice that this release and cancellation agreement is also used when a buyer wants to cancel an exclusive right to buy listing.