When it comes to selling a property, most people often rely on the services of real estate agencies to list their property and find potential buyers. However, before engaging the services of any agency, it is important to understand the various types of agency agreements available, each with its own benefits and drawbacks.
Here are some of the most common types of agency agreements that can be used to list a property for sale:
1. Exclusive Right to Sell Agreement – This is the most common and widely used agreement. It grants the real estate agency the exclusive right to sell the property. This means that the agency is the only one authorized to list the property for sale and receive any commissions from the sale, regardless of who finds the buyer. This type of agreement gives the agency more control over the sale process and ensures that they put in more effort to get the property sold.
2. Exclusive Agency Agreement – This agreement gives the agency exclusive rights to sell the property, but the owner can still sell it themselves without obligation to pay any commission to the agency if they find the buyer. However, if the agency finds the buyer, they will receive the agreed upon commission. This type of agreement is suitable for property owners who want to retain some control over the sale process.
3. Open Listing Agreement – This type of agreement is non-exclusive and allows the owner to list the property with several real estate agencies. The agency that finds the buyer will receive the commission. This agreement gives the owner more control over the sale process but can be less effective in getting the property sold quickly.
4. Net Listing Agreement – This type of agreement is not legal in all states and is typically not recommended. It involves the real estate agent receiving a commission that is equal to a prearranged percentage of the selling price of the property. Any amount above the percentage goes to the owner. This agreement can lead to a conflict of interest between the agent and the owner, as the agent may be incentivized to sell the property for a higher price.
In conclusion, it is important for property owners to carefully consider the type of agency agreement they enter into before listing their property for sale. Each agreement has its pros and cons, and it is crucial to find the one that best suits the owner`s needs. A competent real estate agent can help guide and advise on the best agreement to use to get the desired result.