What if My Seller Asks for a 'Listing Exclusion?'

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Education & Training with Sell with Soul

For those who haven't encountered a "listing exclusion" yet, it's simply a request from a seller that if a certain person or persons buy the home after it goes on the market, your listing commission won't apply. For example, perhaps the seller knows a guy at work who says he'd be interested in purchasing the house, but he's still thinking about it. Your seller doesn't want to wait for him to make up his mind to go on the market, but neither does he want to pay you if the guy actually ponies up. So, the seller asks you to "exclude" this particular person from your listing agreement.

Should you do it?

My advice? Sure. Don't argue, don't explain, and don't make a big deal out of it. Write in the exclusion and get on with putting the house on the market. The chances that this guy is actually going to purchase the house are slim, but if he does, the seller will probably need your assistance to get the contract written and to closing. For which you most certainly may charge a reasonable fee.

No reason to go to battle over this. Save your energy for bigger things!

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Robert Hajek 06/02/2009 05:46 AM
Topic:
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Rainer
1,801
Jeff & Amber The Home Team
OLD COLONY REALTORS - Charleston, WV

Jennifer,

Hello. As always, great advice! What you suggesteed I have done in the past on three occasions,. Exclusions don't bother me as the odds of that purchase panning out are pretty high. After the thirty days are up I  get the excluded buyer's name and I try to help that person purchsse the home or help them find a new home. I kill two birds with one stone sort of speak. as a matter of fact  I just listed a home today and the seller asked for an exclusion. I gave the excluded buyer 30 days to secure financing and buy the home and of course, I did offer my sellers my services if this was to transpire for a fee.

Thanks again jennifer you awesome!

PS: Looking forward to THE SUMMER OF SOUL!

Jeffrey Mangus

WWW.HOMETEAMWV.COM

Jun 01, 2009 05:32 PM #98
Rainmaker
199,795
Mark Velasco
Sharpstone Commercial - Whittier, CA
Top Producing COMMERCIAL Team 30+ years experience

Jennifer. You are right. The guy from work almost never buys the house. lol

Jun 01, 2009 05:51 PM #99
Rainer
40,483
Harrison Painter
GoGladiator Media - Carmel, IN
New Media Consultant

If the Seller wants an exclusion, I would not list the property until they change their mind.

It shows a lack of respect for the work that I am about to do. i understand that the guy at work never buys the house, but it is starting the relationship on the wrong foot. I am VERY committed to my clients, and I expect the same in return.

- Harrison Painter

 

 

Jun 01, 2009 07:58 PM #100
Rainmaker
4,798,469
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Yep, happens often.  I do 30 days maximum though.  Never had one of these exclusions buy the home.

Jun 01, 2009 11:10 PM #101
Rainmaker
1,268,069
Al & Peggy Cunningham, Brokers
RE/MAX West Realty Inc., Brokerage - Brampton, ON
Our Family Wants To Help Your Family!

Wow, at this point Jennifer you have 100 comments. Well here is our 2 cents worth anyway!  We accept the exclusion with a 2 week limit.  You are right, we have never had the "excluding" party come through! Go for it was good advice!  

Jun 01, 2009 11:44 PM #102
Rainmaker
471,648
Geri Sonkin
Douglas Elliman Real Estate 516-457-7103 - Merrick, NY
Long Island Real Estate & Staging Expert

I've done it many times, but always limit the time to three weeks.  I tell them if these people have any real interest in the property they will certainly go to contract within three weeks, if not they never had any intention of buying.

Jun 02, 2009 12:27 AM #103
Rainer
38,638
Jerry Gray
Wilkinson ERA Real Estate - Winston-Salem, NC
Serving the Triad Since 1980

Jennifer,

I would put an expriration to the exclusion. For example, two weeks. All the efforts could down the drain if it drags out.

Jerry Gray CRB,CRS  /Prudential Carolinas Realty in Winston Salem, NC

Jun 02, 2009 01:03 AM #104
Rainer
20,668
Kristy Baker
Century 21 Act III Realty - Johnson City, TN

Great blog and discussion! I just want to address Virginia's concern about if an excluded buyer has an agent present an offer. When a buyer is excluded from a listing agreement then it is up to the seller to notify the buyer and let them know that they are excluded and if they wish to work with an agent then the buyer will be responsible for the commission. If the seller fails to do this then the buyer may still be responsible for their agent's commission as this is addressed in the buyer agency agreement(check your state forms). In TN our buyer agency agreements have a place to list excluded properties for buyers so it works both ways. To be on the safe side, I would check your local MLS board to see what their guidelines are for listing in the MLS. If nothing else a short note to agents in the MLS comments may suffice such as "coop commission subject to buyer exclusion, contact LA before submitting offers." This way you know before you get an offer if this is from an excluded buyer and there's no surprises for the buyer's agent.

Jun 02, 2009 01:57 AM #105
Rainer
34,869
Chad Boyers
The Danberry Co.- Toledo, Perrysburg, Sylvania, & NW OH - Toledo, OH

I have a seller w/ an exclusion right now (my first one). I didn't put any time frame on the exclusion, we'll see how that plays out. All I know is that since the listing date a few weeks back, this person's name hasn't been mentioned once. I'm guessing it won't happen...

Thanks for everyone's insight!

Jun 02, 2009 02:09 AM #106
Rainer
24,961
Ryan Gorman
Campo Realty - Chatham, IL

I have done several exclusions in the past, but I have never thought to use a time frame.  I will be using one now.  This is why I play in the rain!

Jun 02, 2009 03:13 AM #107
Rainer
20,978
Beth Anderson
Goedert Real Estate - Tecumseh, MI
Realtor - Tecumseh / Lenawee County

Jennifer, you asked about the comments that mentioned putting pressure on the potential buyer by giving them a time limit and you wondered how that had any impact.  What I found in the few instances where I was asked to do an exclusion was the seller was giving a special lower price to the potential buyer because of the fact that no commission was going to be due, once the exclusion is past, that buyer would have to up the offer to cover those added seller expenses.

Jun 02, 2009 03:19 AM #108
Rainmaker
288,656
Tim Bradley
Contour Investment Properties - Jackson Hole, WY
Commercial Real Estate Expert in Jackson Hole, WY

We regularly see this, and routinely add the exclusions to the listing. We will put a 30 day deadline on the exclusion.

Jun 02, 2009 03:41 AM #109
Anonymous
Olga Diaz-Potter

You're right Jennifer. Chances are that this person won't buy the house.  It is irritating though as you want to begin the selling process with a clean slate.  I guess it's one of those where it's not worth the fight and best to get the listing.  Thanks for the post.

Jun 02, 2009 11:53 AM #110
Rainmaker
48,076
Roshan Quigley
Weichert Realtors - Manalapan/Marlboro, NJ - Manalapan, NJ

I have put in an exclusion for 30 days too for a potential buyer - however once a seller told me he wanted a chiropractor written in as an exlusion but didn't know his name - gave the "no name chiropractor" 30 days exclusion!

Jun 02, 2009 12:38 PM #111
Rainmaker
307,533
Ryan Hukill - Edmond
ShowMeOKC Real Estate Pros of KW Elite - Edmond, OK
Realtor, Team Lead

Jennifer, I agree 110%... take the listing and get to work finding a buyer before the 'other guy' even has a chance to cut you out of the deal.

Jun 02, 2009 03:48 PM #112
Rainer
49,011
Earleene Woods
Keller Williams Experience Realty - Murray, KY
ASP, CRS, GRI

Jennifer,

I always tell the seller I will be glad to give the party an exclusion, but I can only give them the exclusion for 2 weeks.  I tell them a lot of times people will tell owners they might be interested in their property because they feel uncomfortable telling them they are not interested in it.  I then instruct them to call the exclusions as soon as I leave to let them know about the time constraint.  If they are interested, they will move on it.

We have to indicate on our MLS if there are exclusions on the listing.  By getting them out of the way in the first 2 weeks, it prevents the owner from calling them up after you have spent a lot of time and money marketing their property and offering it to the exclusion for less than your current offer.  

Jun 02, 2009 11:51 PM #113
Rainmaker
1,601,104
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Your right, get the home on the market & exclude the person for 10 days. You have a better chance with a lottery ticket then the seller has with that buyer purchasing his home. How many times have FSBO's thought someone was going to put an offer in on their home and nothing happens. He just wants to be sure that tire kicker is excluded. Makes the seller feel better and you've got your listing! Win-win.

Jun 03, 2009 01:06 AM #114
Rainmaker
131,417
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

I agree with you 100% Jennifer.  Save energy for other stuff.

Jun 03, 2009 04:41 PM #115
Rainmaker
272,537
Jim Palmer
Chipola Realty - Chipley Office (850) 638-2777 - Sunny Hills, FL
Washington County, Florida

Wow..it just slapped me in the forehead..if the excluded party drags in another agent then they have betrayed the trust given to them by the seller.. So...write the offer Mr or Mrs Buyers agent..and I will take my listing side..Thanks..and every one have a nice day! 

Jun 04, 2009 02:15 PM #116
Rainer
39,153
Michelle L. Mayo
RE/MAX on the Bay - Niantic, CT
Shoreline Homes Girl

Just found this.  Thank you Jennifer.  I just recently took a listing where I had the same exact thing happen.  I wrote in the exclusion and took listing.  My manager felt I shouldn't have done it, so I was glad to read your point of view on it.  Thank you.

Apr 27, 2010 05:57 AM #117
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Jennifer Allan-Hagedorn

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