Types Of Real Estate Listing Agreements

The real estate market is constantly fluctuating with certain periods seeing demand for different types of properties and others witnessing low points. What goes without saying is that if the current period is low it will go up in time. This means that property sellers just have to wait for the right opportunity to get a good price.

Real estate given to brokers to sell is listed using one of several agreements. If the broker is from an association of realtors the contract will include several key details. A list price, beginning and end dates, how much compensation the broker will receive, how the brokerage fee will be paid, authorization for the broker to meet with other brokers and so on. Once the broker is able to find a buyer, he gets a commission and the seller his money.

There are five main types of listing contracts each designed to benefit all or some of the stakeholders. Let's check them out in some detail.

Multiple listing service

Multiple listing service (MLS) refers to listings distributed via the internet to MLS members. They may also be given to real estate websites for the public to view. This gives property hunters an easy way to stay in touch with what's available as well as direct them to the necessary people to contact. MLS members and MLS listings offer a helpful service as they enable sellers to list their properties on various sites for greater visibility which in turn increases the odds of selling.

Open listing

An open listing creates competition between the seller and his agent as no commission is owed if the seller manages to sell his property before the agent can find a buyer. The agreement may be made between the seller and more than one real estate agent.

Open listings are not favored by agents because there are no guarantees. However, a low inventory can push them to change their minds.

Exclusive agency listing

This listing is similar to an open listing where an agent receives a commission only if an acceptable buyer is found. If the seller finds a buyer before the agent, the commission is waived and the agent goes home empty-handed. As with open listings, agents are usually spurred to accept such listings only if inventories are low or the property being offered is unique.

Net listing

Net listing is illegal is some states and doesn't produce an outcome favorable to both sellers and agents. The seller lists a net price and the agent adds his cut to it. If the agent manages to sell a piece of property that's much more than the seller's list price with the commission being pocketed by him, the seller may feel disgruntled. Or, if the agent receives little to no commission despite finding a buyer he may refuse to inform the seller.

Exclusive right to sell

An exclusive right to sell listing gives an agent a time period to sell a piece of real estate. If the agent finds a cooperating agent the commission is split between the two. What makes this listing popular is that sellers don't lose out if agents can't find a buyer within the stipulated time frame. Responsibility is shifted to another agent as the agreement is renewed. Almost all real estate sellers use this listing as it protects the seller, the agent and the cooperating agent, if any.

If you are looking to list your property, the first thing that you need to know is the types of real estate listing agreements available. For complete information on beaches listings in Toronto, visit this site.