Exclusive Right to Sell vs. Exclusive Agency Listing Agreements - Transactly

Written by Madison Clifton | Jun 11, 2019 5:00:00 AM

Exclusive right to sell listing agreement or exclusive agency listing agreement? This is a question you could be fighting with after deciding to sell your home. Lucky for you, you may be able to answer that question in a few short minutes.

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Exclusive Agency Listing

An exclusive agency listing agreement is defined by an agent having the exclusive right to represent the seller, but the agent will only receive a commission if they bring in the buyer. If the agent fails to bring in a buyer, the seller is not required to pay a commission. While this is attractive to sellers, it is not a golden opportunity for the agent. Due to this, the exclusive agency listing type is not an overly popular, or common listing agreement.

Pros

Potentially Save Money. This type of listing agreement leaves a window for you to potentially save some money. If you find the buyer of your home, then you do not have to pay any commission fees. If you have someone in mind you know absolutely loves your home and is looking to buy, this might be the listing agreement you need to get.
More Control. Using an exclusive agency listing allows you to bring in buyers that you already know and trust. This increases your privacy as well as your control over selling your house.

Cons

Less Agent Motivation. If an agent is not guaranteed a commission it is possible they will not put as much effort into marketing your home. Some agents may not even list your house on the multiple listing service. This would put the bulk of the work to market and sell your home on you.
More Work for You. Since there is a possibility that your agent will be less motivated to work hard to sell your home, you pick up a lot of work. While you may be excited for the task ahead, make sure you do your research so you are prepared.

Deciding to use an exclusive agency listing is a risk, but that risk has the potential to pay off. If the buyer you found falls through for a number of reasons, or you are having trouble marketing your home, you may not have the full force of an experienced agent behind you. Again, if you already have an interested buyer this could be well worth it. If you do not, you may want to evaluate how willing and able you are to find a good buyer to sell your home to.

Exclusive Right to Sell

When you have an exclusive right to sell agreement in place, it means your agent has the exclusive right to sell and to earn a commission off of the sale of your house. Whether or not you bring in the buyer or your agent does, your agent still earns a commission. While this does seem slightly unfair, it is the most common agreement between a seller and agent. There is also a definite upside to an agent working hard trying to earn a commission.

Pros

Motivated Agent. Like most contracts, an exclusive right to sell agreement has an expiration. Due to this, and the guarantee they will earn a commission if your home sells, agents will do everything in their power to sell your home fast and for the best price.
Multiple Listing Service. Your agent will be trying to sell your home as efficiently as possible. To do this they will list your home on the multiple listing service. Here your home will get exposure to thousands of buyers and buyers agents potentially interested in buying your home.

Cons

Cancellation Policy. You will want to make sure that you thoroughly read your listing agreement and review the cancellation policy. Some contracts do not allow you to cancel the contract until the time frame of the contract has ended. This can be an issue if your agent isn’t providing satisfying service.
Commission Policy. As previously stated, the agent in this type of listing agreement will receive commission off your home regardless if they discover the buyer, or you do. While this is not the most pleasing quality of this type of listing agreement, it is standard for the industry. It is important to consider, if you do not have a buyer already lined up when deciding to sell your home, what are the odds that you will personally find one.

An exclusive right to sell agreement takes the stress of marketing your home off you. There is a reason that exclusive right to sell is the most common listing agreement. It offers the best deal to both the seller and the agent. The agent is offered the security they need in their work, and the seller is able to utilize the full service of an experienced agent.

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Biggest Difference

The biggest difference when comparing an exclusive right to sell listing to exclusive agency listing, is whether or not the agent is guaranteed a commission. An exclusive agency listing does not guarantee an agent commission, while an exclusive right to sell listing does guarantee commission when your home sells. While this may seem like a substantial difference, consider what you are getting in each type of agreement. After reviewing the pros and cons of each listing type, you’ll be able to make a decision and start selling your home.

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