Got a phone call the other day from a potential lakefront seller who said he wanted me to list his property. At first I was thrilled - who doesn't want that kind of phone call, but then, immediately, I thought...this is too easy. He hasn't even MET me yet, or seen my home sales marketing plan.
He then told me that he was contacting a bunch of realtors and was not going to list exclusively with any of them; he was going to give everyone what we call an "open listing." Just let them all do their best and may the best realtor win. I think I surprised him when I said "Not me!"
Why on earth not? Why would I turn down a property that could be worth a lot of money?
Simple.
LIMITED EXPOSURE FOR YOUR LAKEFRONT HOME (or any home, really)
- No MLS Exposure. Open listings are not allowed on the Pike/Wayne MLS. What is the MLS? It is the
multiple list service brokers use to share their listings with one another. If open listings were allowed on the MLS, we would have pure chaos - several different instances of the same listing being found over and over, and quite possibly with conflicting and erroroneous information.
In order to preserve the integrity of the MLS, only exclusive listings are allowed. In some parts of the country, an MLS may not be important, but it sure as heck is here in Northeast PA. You are shooting yourself in the foot if you do not get your home on the MLS. Your listing will not be seen by the majority of the agents in Pike and Wayne County. If agents don't know about it, how can they sell it? - No REALTOR.COM Exposure. Realtor.com is the nation's #1 real estate website. Many, if not most, buyers go to Realtor.com to look for homes for sale. If your home is not in the Pike/Wayne MLS, it will not be on Realtor.com.
- No Weichert.com Exposure. Weichert.com only allows exclusive listings as well. And Weichert.com syndicates listings all over the Internet - Zillow.com, Trulia.com, Yahoo Real Estate, etc. Chances are this rule is true of other franchises as well, though I may be wrong there.
- Limited Advertising. Most brokerages will spend money promoting the listings of sellers who have committed to them. The only brokerages who usually pay money to advertise open listings are those offices who do not have many exclusive listings. Is that the caliber of company you want representing you in the sale of your greatest assett? If you are going to end up doing most of the marketing, you would be better off going FSBO.
LIMITED COMMITMENT - is it reasonable to expect a financial and marketing commitment from someone to whom you yourself will not commit? Because the commitment is not there on either side, marketing for your home will likely be limited to a spot on the agent's website, maybe their broker's website, a flyer in the window, and perhaps an occasional Craigslist ad or two. Some agents may definitely put more effort into marketing an open listing, but I must ask...do you want someone "with nothing else to do" to market your most valuable asset?
LIMITED POOL OF BUYERS - many buyers prefer to work with buyer agents, not seller agents. The few buyers who do seek out seller agents do so in hopes of cutting a great deal - paying less money for your home. On the whole, though, most buyers prefer to work with buyer agents, and will not contact the seller agent at all. While there are a few agents who sell a large proportion of their own listings, many if not most home sales are cooperative efforts (via the MLS) on the part of a buyer agency and seller agency.
SO - WHY IS AN EXCLUSIVE LISTING BETTER?
Broad Exposure. See what I wrote above, and turn it around. More agents and more buyers will be exposed to your home.
Committed Marketing. Exclusive listings represent a commitment on the part of both the seller and the broker and the agent. The broker agrees to diligently and skillfully market the property, and the seller agrees to pay the broker when the home is sold. For insights on my marketing plan, click here.
I know that there are real esate agents out there who, frankly, should hang up their license and do something else. This could be why some sellers want to do an open listing rather than go "exclusive." These agents take crappy photos, write dumb descriptions, and think that merely putting the home on the MLS and sticking a sign in the yard is enough.
A good real estate agent will take excellent photos, create a virtual tour, know how, where, and when to market your home. A good real estate agent will know all the latest tricks and tools of the trade to get your home exposed to the most amout of buyers possible. A good real estate agent maintains a good relationship with other agents in the area, knowing that they may very well be working on opposite sides of the closing table one day, and that can work to the advantage of both buyer and seller.
Some sellers have multiple friends or associates who are real estate agents and they worry about offending one or the other of them. But by giving them "open listings" you really are creating more of a strain on your relationship(s) than if you picked one to have the exclusive. The others would all have equal opportunity to sell the listing, and the listing agent would feel free to put the most effort into marketing, knowing that they will be paid for their work when the job is complete.
Which brings me to my final point:
WHO WANTS TO WORK FOR FREE? Not I. An open listing runs that VERY risk. Another agent could see the 
fantastic marketing I'm doing for your listing, and quickly deduce that it's an open listing due to it being absent from the MLS. And then they call their buyer, and then they call you, and since you are not committed to me, you don't care if I get paid or not. Why would I leave myself wide open for something like that? Would you think much of me as a professional if I did?
Would you like your boss to say "Well you did a great job, but I'm not going to pay you for your work these past three months. Thanks for all your hard work on my behalf!" Or, would you take a job where the boss says "Work hard - do your best for me, and I just might pay you!" Of course not. Why expect a real estate agent to do that? Do you think we do not have bills to pay or families who depend on us? Is our time not as valuable as yours?
I am running a business, NOT a ministry or public service venue.
If you are worried about being "tied to me" should you find we can not work together, I promise to turn your listing over to the broker to re-assign to another agent who may be a more suitable fit for you.
But if you won't commit to me, how can you expect me to commit to you?
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