Open listing agreements can help you save between 1-3% in agent commission fees. This fee is unavoidable when it comes to other types of agreements. According to NAR’s member profile, about 22% of real estate agents used this type of agreement.
An open listing agreement contract permits you to enlist multiple real estate agents at a time. This offers flexibility in marketing and selling your property. However, you should consider these features when selecting an open agreement.
📌 Reasons To Consider An Open Listing
- Sellers prefer open listing agreements for the flexibility and control they offer.
- Open listing helps increase the visibility of your property by leveraging agent networks.
- Agents enter open listing agreements as it allows them to work on multiple listings.
What Is an Open Listing Agreement?
An open listing agreement is a flexible contract between you and the real estate agent. The agreement allows you to work with several agents simultaneously. Each agent attempts to sell your property independently.
Moreover, the agreement also lets you look for buyers on your own. And if you can find a buyer independently, you won’t have to pay any commissions. However, if any of your agents bring you a potential buyer, you’ll have to pay them.
What Are the Features of an Open Listing Agreement?
Here are some defining features of an open listing agreement:
1. Non-Exclusivity
An open listing allows you to sell your home through multiple agents, offering greater market exposure. As a result, you’re not bound to a single agent. This increases the chances of finding a buyer through diverse networks.
2. Seller’s Rights to Sell Independently
While you work with several agents, you also retain the right to sell the property yourself. So, if you find a buyer on your own, you won’t have to pay any commission. In this case, you get both freedom and financial benefits.
3. Flexibility for the Seller
An open listing provides significant flexibility. You can test the market with different agents and selling strategies. As a result, you can benefit from diverse approaches brought to the table by different agents.
4. Short-Term Arrangements
Often, these agreements are shorter than exclusive listings. Open listings last between 30 to 60 days. In essence, this setup allows you to change your strategy or agents without long-term commitments.
How Does an Open Listing Work?
Here’s how this agreement works:
- Agreement Creation: You start by signing an open listing agreement with one or multiple agents. This agreement will contain all the terms including details on commissions.
- Listing: Each agent may list the property for sale using their networks.
- Selling Effort: You and your agents will then work independently to find buyers for the property.
- Communication and Negotiation: You can then negotiate the terms for your sale, reject or accept it. If you are engaged in marketing efforts, you may receive offers directly.
- Sale and Commission: Accepting an offer leads to closing. If your agent brings the buyer, they get a commission; if you find the buyer, no commissions are required.
Pros and Cons
As a seller, you have to weigh the pros and cons before you enter any legal contract. Here are some pros and cons of an open listing agreement:
Pros
- Increased Exposure: Having multiple agents increases the exposure that your property gets in the market. This speeds up the sales process.
- Save on Commissions: You have the option to sell your property independently. In this case, can also save on agent commissions.
- Flexible Contract: An open listing agreement is a short-term contract. It is also a non-binding agreement makes it easier to cancel when needed.
Cons
- Lack of Motivation: With multiple agents involved and increased competition, the agent’s motivation to sell may decrease. They are also less likely to prioritize your home’s sale.
- Inconsistent Marketing: Each agent has a different strategy. Diverse agent strategies in open listings can lead to uncoordinated efforts, causing potential delays in property sales.
Is an Open Listing Agreement the Right Choice for You?
If you considering an open listing, assess your comfort with managing multiple agents and selling by owner. Also, evaluate how much control and involvement you want in the selling process.
An open listing agreement offers flexibility and potential cost savings on commissions. It’s ideal if you’re confident in your ability to sell independently and have a keen understanding of the market.
If you’re looking to sell a house, Houzeo offers the perfect solution. Houzeo helps you list your home on the MLS and offers user-friendly tools to sell your property effectively.
Frequently Asked Questions
What is an Open Listing Agreement in real estate?
An Open Listing contract is an open non-exclusive Listing Agreement between a property owner and a real estate agent. It grants the agent the right to list and market the property for sale.
Can Open Listings be entered into the MLS?
Generally, Open Listing properties are not listed on the MLS by the associated agents or brokerages. If you want your property to be listed on the MLS, you can hire a third-party discount broker or a Flat Fee MLS service like Houzeo.
Who gets the commission in an Open Listing Agreement?
The benefactor of the commission in an Open Listing Agreement is the agent and their associated brokerage if they bring in the buyer. However, you can save up on the real estate commission fees if you are able to bring a buyer yourself.
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