Exclusive and Non-Exclusive Listing Agreements
A listing agreement allows a real estate agent to sell a piece of property and receive a commission when the sale is completed. The listing agreement may be exclusive or non-exclusive. When it is exclusive, the real estate agent has the right to a commission irrespective of who sells the home. When it is non-exclusive, the real estate agent will only get a commission if he or she sells the home. At Pulgini & Norton, our real estate lawyers can help Boston homeowners make determinations about exclusive and non-exclusive listing agreements and other matters associated with property transactions.Exclusive and Non-Exclusive Listing Agreements
Listing agreements are contracts between real estate agents and sellers. Through the listing, the seller agrees that the agent has permission to advertise and handle the sale of a home. The terms of the agreement bind the seller, and they have binding financial consequences. The terms will include the agent's obligations and what a seller can do if the agent fails to meet them.
Terms traditionally include the amount of the commission (which is traditionally 5-6% of the sales proceeds), the exclusive right to sell the home, how long the agreement will last, a safety clause protecting an agent after the expiration date, representations about specific facts such as the right to sell and whether anyone else has an ownership interest, duties of the agent and authorizations, and sometimes a dispute resolution clause.
Non-exclusive listing agreements may benefit sellers because they will not be obliged to pay a commission to an agent if they do the marketing work to get the home sold. For example, if you informally find a buyer for your home through your own efforts, you will not be required to pay your non-exclusive listing agent a commission upon sale.
Non-exclusive listing agreements also allow a seller to list a home with numerous agents, and they require payment of a commission only to the agent who actually sells the home. The downside of non-exclusive listing agreements is that if agents are not guaranteed a commission, they may not try to sell the property as aggressively (or at all) as they would if they had an exclusive listing.
In an exclusive listing agreement, the listing agent will have most of the control of the real estate transaction. Regardless of who finds the right buyer, the listing agent will earn a sales commission. In some cases, two agents are involved, and they are authorized to split the commission. Usually, the exclusive right is limited by contractual terms to a period in which an experienced agent can effectively market the house or condo. If a listing or contract expires, and the agent still has not sold the home and the seller is unhappy with the agent's efforts, the seller can try to find another agent.Seek Legal Guidance for a Property Transaction in Boston
The experienced attorneys at Pulgini & Norton can discuss property transactions with people in the Boston area. We also represent clients in Somerville, Cambridge, Medford, and other cities in Massachusetts. Call us at 781-843-2200 or contact us via our online form to set up a consultation.