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Do You Have Open Listings In Your Area?

An "OPEN LISTING" is a listing in which a seller decides to list/ cooperate with several real estate companies, maintaining the ability to locate their own buyer, thus paying a lesser fee, or avoiding fees altogether in the event that they locate their own buyer.

Fine. Our location is a vacation area for second homes- NYC people.

Except, I find myself in an "OPEN LISTING" environment that proffers the following to sellers silly enough to engage: provide your property listing agreement to multiple real estate companies (they all enter listing data, non MLS, but site wide), AND IF AN AGENT FINDS A BUYER, THE FEE IS FULL. X percent- whatever that may be- for both the listing and selling sides.

Huh?

Wasn't an understanding of that double end about when FSBO sites entered the picture: sellers, disliking real estate companies (READ: FEES) deciding to go it alone, but saying, "here- if you bring me a buyer, I save half?" Successful on occasion, FSBO has been, for some time, an understanding by sellers that the fee paid would include a selling agent. NOT full fee.

Is any other area in the United States familiar with "open listings", in which a FSBO accepts an offer from a local real estate company representing the buyer, but collecting a fee representing both sides, or is the East end of Long Island (HAMPTONS) selling contingent just not getting it?

I love retro, but this retro is perplexing. A real estate agent with a buyer approaches a seller with an offer. That offer includes a fee for representing the buyer. Except, I want the cost of listing side, too.

Why would sellers accept a LISTING fee, as well, in the Hamptons?

Posted by Laurie Mindnich on 10/17/2009 08:10 PM

Comments (12)

hampons real estate, east end long island, nyc second homes

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12 Comments on Do You Have Open Listings In Your Area?

OCT

I have had sellers try to pitch me on this...not sure where they are getting the idea, but I tell them nicely as possible ABSOLUTELY NOT and explain why this is such a bad idea and a legal nightmare. We all want listings, but having a diluted message by accepting an open listing seems to me like a backwards idea :)

Nick, BACKWARDS is right. 1970's real estate. I was still a teen at the end of that era, but entered real estate shortly thereafter- recall at classes understanding that ethically, open listings were a dicey acceptance for real estate agents if misunderstood by either seller or buyer. Let sellers on their own provide a compensation figure, to be accepted or not by an agent representing the buyer.

Laurie in my area it is rare. I can't see why an agent or a seller would go this route; not a win win but could rather be a nightmare.

OCT

I'm sure there are some out there, but I won't take an open listing. The most I'll do is, if a seller has someone who they think might want to buy their house, I write a clause into the listing that states something like.... If (name of potential buyer) and sellers agree to all terms, and sign a fully bilateral contract by (insert date- always less than 30 days from now), then...this part is where I negotiate some more.... seller(s) will only pay the previously stated listing withdrawal fee to Adams Cameron & Co., REALTORS.... OR Seller will pay (insert pre-set amount) to Adams Cameron & Co., REALTORS, and brokerage will handle (insert limited services-NO work on behalf of the buyers!) to help facilitate the closing. I also have the buyers sign a Notice of Non-Representation so they realize I'm working for the sellers. If the buyers decide they want some help too, then the negotiations begin with them as well.

The process you're describing sounds leads me to believe the agent must be helping the parties on both sides of the transaction? In that case, the commission would be for the full amount. That's why I structure my "partially/limited open listings" the way I do. I want to help my sellers sell their property! But my services have value. And let's face it. Those buyers are going to call me with questions if I'm not VERY clear about representation, and fees for my services.

There is a hugh difference between a for sale by owner and open listings with the most obvious one being with an open listing there is a signed agreement with terms decided in advance what the payment will be and that indeed there will be a payment. The listing is given to many different offices/agents. In this day and age most agents won't do open listings and sellers who do this don't realized the harm it does to them, they don't believe that there house needs marketing and don't get the real estate thing. Often you see this from individuals who come from other cultures where real estate is practiced differently and they don't see the american system as the way to do this. FSBO's just think they can do it on their own for whatever reasons.

Jennifer, it's confusing- what I recall (vaguely) years ago was being discouraged from such a practice because of the possibility that sellers and buyers would be confused as to who represents whom- and sellers sort of morphed into a fsbo system with a bit more clarity.

Lisa, it's really obvious when you see one here, because while the properties are not permitted to be in the MLS, they do appear (six times duplicated) on other sites- sort of mucks it up for buyers looking as they wonder why they're seeing the same house over and over. Worse is when the prices vary...

Miriam, that makes sense- I wouldn't do one for reasons that include buyers jumping from one listor to another, or other such confusing elements- I'd rather just bring the buyer if I have one, and keep it simple. As a seller, the purpose for an exclusive is (typically) to insure that it gets exposure to all agents through an mls; while having a property on six real estate websites was fine pre-MLS's (or other listing systems) with IDX feeds, the property shows up everywhere, anyway. Odd choice for Realtors to make, this "open" listing thing with it's inherent danger of a seller or buyer unclear about representation; equally odd (to me) for sellers to be OK with fees that are typically reserved for a buying side only, ABSENT a designated listing company committed to spending money to get it sold....

I've only seen it here one time in fifteen years. Thank God!

Tom, I agree- it can certainly be a mess!

Laurie, I have to wonder what's up with New York State in Real Estate? We seem to have things here that no one else does it seems to make things more confusing and complicated then they already are....

Carole, it seems odd that a real estate person with a business to run would be Ok providing a service that provides complications, or that a seller wouldn't see the simplicity of paying solely for a buyer (vs. full listing)...

NOV

Open listings are not allowed in Indiana.

No way, Irene- is it law?? Send me a link! I remember YEARS ago in Colorado classes being discouraged from taking tham, but can't recall if they were not allowed...they make little sense for sellers. I remenber "net" listiings not being permitted.

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