Types of Listing Agreements - Exlusive Right to Sell

Types of Listing Agreements

There are 4 types of listings in Texas... Open Listings, Exclusive Agency, Exclusive Right to Sell, and Net Listings.

Exclusive Right to Sell Listings - Unlike the open listing or the exclusive agency listing, the exclusive right-to-sell agreement gives the broker complete rights to the commission during the listing term.

Under an exclusive right-to-sell listing agreement, the following terms apply:

• The seller is not allowed to list the property with any other broker.
• The broker will still be owed commission or other compensation per the terms of the agreement if the seller procures his or her own buyer.

For obvious reasons, this is the most common type of listing agreement in my area for residential real estate.  It protects the listing agent and the seller equally.  I can spend my efforts and marketing dollars with reasonable assurances that once I find a buyer, I'll get a paycheck.  Although, paychecks are never guaranteed in real estate!

We do run into problems on occasions with sellers entering multiple exclusive right to sell contracts, don't we!!  The most common way is when a seller switches brokerages without being released from the initial contract in writing.  In my experience, the initial listing agent probably has no right to try and keep a seller in a contract. 

Some of the more shady firms attempt to do this at all costs.  I have seen many listing agents not agree to release a seller from the listing contract, take down their signs and lock boxes, and then once the next listing agent comes along and procures a buyer, the original listing agent thinks they are owed a commission.  Here's the thing:  By removing their signs and lock boxes and discontinuing any marketing efforts etc, they are more than likely in default of that original listing agreement themselves!

Why anyone would ever try to force someone to work with them is beyond me.  The only time I can see this being an issue is with regards to the protection clause.  If that original listing agent had procured the buyer that the seller ultimately ends up selling the property to.

Anyway, share your thoughts... and has anyone used anything other than the Exclusive Right to Sell Listing Agreement?

Next topic will discuss Net Listings.