When you decide to involve a licensed broker in the selling of your home, a legal contract is drawn up between you and the broker. This legal document authorizes the agent or broker to stand for you in the home selling process. This is known as the listing contract.
Several different listing contracts are available to choose from, though “exclusive right to sell” is the most preferred. The different listing contracts differ in the level of endorsement that you give to the broker.
Some examples are:
Open Listing
This is a commonly used listing, wherein the client wants to maintain a certain degree of control over the selling process. It is good for people who want to be involved in selling their homes. This contract entitles the agent to conduct house showings and receive a specified percentage as commission if the client chooses to purchase your home. The advantage here is that you are not in kind of binding and are not the exclusive hold of the broker. The disadvantage being that you cannot expect a very high degree of involvement by the broker and also not much marketing.
One-Time Show
It is quite similar to the previous listing. It is normally used by people who want to sell their home on their own and involve an agent only for home showings. This listing contract helps in identifying potential buyers, and the agent is promised a commission if the house is sold to the buyer. Again, like the open listing, an element of advertising or marketing by the agent is missing.
Exclusive Agency Listing
When you decide to sell your home, you will realize that different listing contracts engage different people. This particular listing includes a broker. Basically this listing lets you sell your home, without having to pay the broker his commission except in the case of the house being sold via a licensed real estate agent. In the case of the house being sold without any contribution of the agent, you need not pay any commission at all. This is a popular type among sellers, as it requires them to pay only if a sale falls through.
Exclusive Right to Sell Listing
All agents and brokers love this listing for obvious reasons. They have the right to do whatever they may think is required to make the sale. This listing lets you relax while all the hard work is done by the agents. You can expect a blitzkrieg of marketing and a lot of advertising from their side.
Before you decide on a particular type of contract listing, get to know the options available to you. Determine how much you are prepared to be a part of the process. Your degree of involvement will help you decide the contract listing required. Also discuss the positives and negatives of each type before you decide. The listing contract is the first legal document that you draw for selling your home. Let the first step be taken after due deliberation.