The real estate agent will have you sign a listing contract and an agreement regarding his or her commission.
The most common listing contracts are the following.
• Exclusive Right to Sell. This is the most common agreement. It gives one real estate agent the exclusive right to represent the seller in marketing the property. Most Exclusive Right to Sell contracts also allow the real estate agent to put the home on the Multiple Listing Service (MLS) and may specify other marketing methods to be used. This type of listing will obtain the most work from the real estate agent.
Even if you, your family, or your neighbor sells the house, the agent will get his or her commission. Many homeowners have attempted to forego giving the commission to the real estate agent by refusing a legitimate offer brought in by him or her and selling directly to a buyer. This does not work and can cause you to be sued by both the real estate agent and the buyer the real estate agent found.
• Exclusive Agency. This contract also gives one real estate agent the exclusive right to represent the seller in marketing the property. The big difference is that no offer of a shared commission will be made to a real estate agent working out of another office and this property will not be listed on the MLS. What this does is keep most other real estate agents from wanting to show this property because they are not guaranteed a portion of the commission if they do sell the property. Those who are buyer’s agents where the buyer pays the agent’s full commission may be interested in selling this property because their commission or salary is paid by the buyer.
• Open Listing. This term can mean different things depending upon your location. In some areas, this type of listing lets whoever sells the property first get the commission. In other areas, this means that the owner can sell the home and not pay any commission.
Check with local real estate agents on what type of listing agreement they are offering. Don’t hesitate to ask your agent to explain each type of agreement and what it means to your home sale.