A real estate broker can play an important role in helping you sell a property. A good broker can assist a seller in pricing the property, ensuring all the documentation is available for prospective purchasers, and expanding opportunities for sale through the broker’s networks.
In a prior blog post we discussed three tips for choosing a real estate agent for your business. Once you have identified some good candidates, how do you negotiate a listing agreement? In this post, we introduce the common types of listing agreements for commercial and residential transactions:
Open Listing Agreements
In this type of agreement, the broker does not have the exclusive right to market or sell the property. The broker only receives a commission if an enforceable offer is procured from a ready, willing and able purchaser on the terms set forth in the listing agreement or if the owner accepts an offer during the listing period.
Exclusive-Agency Listing Agreements
In an exclusive-agency listing agreement, the broker is the only person authorized to receive offers for the property and may be entitled to the commission even if another broker makes the sale. The seller, however, can sell the property without the aid of a broker and pay no commission to the listing broker.
ALSO READ What is the Purpose of a Lis Pendens?Exclusive Right-to-Sell Listing Agreements
This type of agreement gives a specific broker the exclusive right to sell the property. The broker is entitled to a commission if during the listing period the property is sold or specifically defined other contractual conditions are met. Under this type of listing agreement, the broker receives a commission even if the owner sold the property without the aid of the broker. Additionally, the broker may be entitled to a commission even if a sale is made after the expiration of the listing agreement, as long as the sale was to a party that the listing agreement presented to before the listing agreement expired.
Net Agreement
In a net agreement, the broker only earns a commission if the selling price exceeds the arranged minimum selling price.
Multiple Listing Agreements
In residential transactions, the seller may have such an agreement with the broker to list the property on a multiple listing service that permits members of the multiple listing service to find a purchaser. The broker that obtains a purchaser will get a share of the commission.
ALSO READ Equitable Servitude vs Covenants and EasementsOur attorneys at Schorr Law are experienced in advising commercial and residential real estate clients in sales, purchases, and rental transactions and in resolving disputes concerning broker representation. Contact us to schedule a consultation! Call: (310) 954-1877 | Email: [email protected] | Use our contact form on the contact us page to send us a message.
