Did you know that the right to sell is one of the most valuable rights in real estate?
When you list your home for sale with a real estate agent, you will sign an agreement that outlines the terms of your relationship. One of the terms you’ll need to agree to is whether you’re granting the agent an exclusive right to sell or an exclusive agency. So, what’s the difference, and which one should you choose?
If you’re wondering what an exclusive agency vs. exclusive right to sell means, you’re in the right place. Read on to learn more about this critical topic.
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What is an exclusive right to sell listing?
An exclusive right-to-sell listing agreement gives your agent the sole right to market and sells your property during the listing period. Sometimes called an exclusive right to negotiate, your real estate agent will use this agreement for a specified time.
For instance, the agreement can be for a set amount of time, typically six months, or it can be open-ended. And there is no set way to find a prospective buyer. So whether through the agent’s network, online listings, or another source—the agent will be entitled to the agreed-upon commission.
What is an exclusive agency listing?
An exclusive agency listing allows you to work with multiple agents simultaneously. If you find a buyer on your own or through another agent, you won’t have to pay a commission. However, if the agent you’ve signed an exclusive agency agreement with is the one who brings in the buyer, then you’ll still owe them a commission.
Exclusive right to sell vs. exclusive agency
An exclusive right to sell gives your chosen agent more incentive to market your home aggressively. The reason being is they know they’ll make money regardless of how they find the prospective buyer.
On the other hand, having multiple agents working on your behalf could potentially lead to a quicker sale—especially if your property has been on the market for a while without any bites.
The decision between an exclusive right to sell and an entire agency ultimately comes down to what’s best for your unique situation. The rule of thumb is to talk with your real estate agent about which type of agreement would work better for you.
The main advantage of an exclusive right-to-sell listing agreement is the broker makes marketing your property a priority.
On the other hand, with an exclusive agency listing, the listing broker may still receive a commission even if the seller sells the property themselves without the help of a broker.
For these reasons, most sellers prefer to sign an exclusive right-to-sell listing agreement when they list their property for sale.
Benefits of an exclusive right to sell listing agreement
There are several benefits to signing an exclusive right-to-sell listing agreement when trying to sell your home. The first benefit is time.
A realtor exclusive to you as the seller will have time to devote to your home and its marketing. This means that your property’s listing will be on many online sites.
It also means marketing through traditional advertising, such as newspaper ads and mailers. This can also include the use of social media and other platforms.
Agents can get creative and find new ways to get the word out about your home.
The next benefit of an exclusive right listing is the negotiating power. The agent will be more able to negotiate with potential buyers because they don’t have other listings to manage. This means nothing can interfere with their ability or willingness to work hard on yours.
An exclusive agent is more likely than one who works for several sellers at once to make personal calls on potential buyers. They attend open houses or leave notes at the homes of people who might be interested in yours but could not make it through an open house or showings by appointment.
An exclusive agent can also offer more personalized service than someone who works for several sellers at once, including:
- Showing up early for appointments
- Staying late when necessary
- Make sure all paperwork is completed fast
That way, you won’t have any trouble closing on time, which can happen if there are problems.
Exclusive right to sell tips
When signing an exclusive right-to-sell agreement on your home, the best thing to do is to ensure that you thoroughly read all documents. This is because there may be some clauses you will not be aware of until you sign the document.
Knowing what you are signing before signing anything is always essential for a homeowner. You should also note that specific requirements must be met when signing this agreement.
Ensure your agent is licensed and registered with the local real estate board. If they are not registered and licensed, it could lead to legal troubles for both parties involved in the transaction.
Next, it’s essential to understand that signing an exclusive right-to-sell agreement will become part of your contract. If anyone else comes along and offers more money than was previously agreed upon, they will not honor their previous offer. They can simply say that they have changed their mind and want more money at this point.
You must also know exactly what services your agent will provide when selling your house. Be clear on what they can and can not do for you under an exclusive right-to-sell listing agreement.
If you have questions about your rights as a homeowner or agent, talk with an attorney before entering into any contracts with anyone who wants to buy or sell your home.
What if the exclusive right to sell agreement expires?
The answer is that the right-to-sell agreement will be terminated, and you will be allowed to sell your home independently. The seller must give the buyer notice of termination at least 90 days before it intends to terminate the agreement. If you have not sold your home during this time frame, then you can proceed with selling your property on your own.
However, it’s important to note that if you decide to renew your exclusive right to sell listing agreement, it can be on the same terms as your initial contract (i.e., a flat fee plus commission split). Keep in mind there are no guarantees that another buyer will come along and purchase your home within this period.
If you decide not to renew your listing contract agreement, you’ll need to find another agent who can help market and sell your home on a commission basis.
How can I get out of an exclusive right to sell agreement?
Multiple options are available if you have signed an exclusivity agreement and want to get out of it. The first option is to terminate the deal altogether by mutual consent.
This means you agree with the agent that your exclusive right should end and that they will no longer be the sole seller of your home. While you may be subjected to fees, there are instances where those fees are waived.
You may also be able to terminate the agreement early or assign your rights to the other party. In most cases, terminating an exclusivity agreement requires written notice from you to be able to get out of the contract. You can send them a letter or email.
While you can meet with them in person or discuss this over the phone, you still want to create documentation about your conversation. This is because most exclusivity agreements contain language stating that they will continue in effect until one party gives notice of termination or expiration.
You can simply wait until the agreement expires. But the good idea is to refer back to the contract and read the clauses that discuss the termination of the agreement.
Ready to get your home sold?
If you plan to sell your home, understanding what an exclusive right to sell means in real estate is essential. Before signing any agreements with a real estate agent, be sure you are comfortable with all the terms. That includes whether you’re granting them an exclusive right to sell or an exclusive agency.
Ultimately, you want to make sure you’re making the best decision for your unique situation. If you are looking to get your home sold fast, choose iBuyers. Submit your address to get started if you’re ready to start the home selling process!
