Open Listing Agreements Making FSBO Sales Easier
If you’re trying to sell your home on your own as a FSBO, it’s still a good idea to create an open listing agreement. An open listing agreement is an agreement between you and a real estate agent that gives the agent permission to market your home and collect a commission if it’s sold by the agent.
What is an Open Listing Agreement?
An open listing agreement is different from a traditional exclusive right to sell listing agreement, which locks you into working with one agent for a set period of time. With an open listing contract, you’re free to work with as many agents as you want, continue working on selling your home yourself, and you don’t have to pay a commission unless your home is sold by one of the agents.
How Does an Open Listing Agreement Work?
If you’re considering an open listing agreement, here’s what you need to know.
1. You Can Work with Multiple Agents
The biggest benefit of an open listing agreement is that you can work with multiple agents. This means that you have the chance to have your home listed with several different real estate firms, giving you a wider reach when it comes to marketing your home.
2. You Don’t Have to Pay a Commission Unless Your Home Sells
Another benefit of an open listing contract is that you don’t have to pay a commission unless your home sells. With a traditional exclusive right to sell listing agreement, you’re required to pay a commission even if your home doesn’t sell.
3. You Can Continue Selling Your Home Yourself
In addition to working with multiple agents, you can also continue selling your home yourself. This means that you’re not relying on an agent to sell your home and you don’t have to pay a commission if it sells.
4. You May Have to Pay for Marketing Expenses
In some cases, you may also be responsible for marketing expenses when you sign an open listing agreement. These expenses can include things like yard signs, advertising, and open houses. Be sure to ask about these costs upfront so there are no surprises later on.
6. You Should Have an Attorney Review the Agreement
As with any legal agreement, it’s always a good idea to have an attorney review an open listing agreement before you sign it. This way, you can be sure that you understand all of the terms and that the agreement is in your best interests.
7. You Can Cancel the Agreement at Any Time
If you change your mind about selling your home or you’re not happy with the agent you’re working with, you can cancel the agreement at any time. There’s no commitment when you sign an open listing contract, so you’re free to walk away at any time.
8. The Agent May Not Be Willing to Show Your Home
One downside of an open listing agreement is that the agent may not be willing to show your home if they know that you’re working with other agents. This can be frustrating if you’re trying to sell your home quickly.
9. You May Not Get the Best Price for Your Home
Another downside of an open listing contract is that you may not get the best price for your home. If multiple agents are involved, they may all be vying for a lower commission, which could mean a lower sales price for you.
10. You Could End Up Working with an Inexperienced Agent
Since anyone can list your home under an open listing agreement, you could end up working with an inexperienced or unprofessional agent. Be sure to interview several agents before selecting one to work with and ask about their experience selling homes like yours.
How an Open Listing Agreement Can Help FSBO Sellers
If you’re selling your home FSBO, an open listing agreement can be a helpful tool. By working with multiple agents, you can have your home listed with several different real estate firms, giving you a wider reach when it comes to marketing your home.
You also don’t have to pay a commission unless your home sells, so it’s risk-free. Just be sure to interview several agents before signing an agreement and ask about their experience selling homes like yours.
What Does an Open Listing Agreement Contain?
An example of an open listing agreement would contain the following:
- The property address and a description of the property.
- The listing period, which is the amount of time the agreement is in effect.
- The commission rate that will be paid to the selling agent.
- A statement that allows the seller to continue to market and sell the property themselves.
- An authorization for the agent to market and advertise the property.
- Signatures from both the seller and agent.
When Would You Use an Open Listing Agreement?
There are a few situations when you might want to use an open listing agreement:
- If you’re selling your home FSBO and you want help with marketing and advertising.
- If you’re not sure if you want to work with a real estate agent or not.
- If you want to interview several agents before deciding who to work with.
- If you’re not sure how long you want to list your home for sale.
Does an Open Listing Have an Expiration Date?
Yes, an open listing agreement will have an expiration date. This is the date that the agreement will end and you will no longer be working with the agent. Be sure to discuss the expiration date with your agent before signing the agreement.
Can an Open Listing Be Renewed?
Yes, an open listing contract can be renewed. If you’re happy with the agent you’re working with and you want to continue working with them, you can renew the agreement. Just be sure to discuss this with your agent before the agreement expires.
How Much Does an Open Listing Agreement Cost?
An open listing agreement doesn’t cost anything upfront. You only have to pay a commission if your home sells, and the commission is typically a percentage of the sale price. Be sure to discuss the commission rate with your agent before signing the agreement.
Who Pays the Agent’s Commission in an Open Listing Agreement?
The seller pays the agent’s commission in an open listing agreement. The commission is typically a percentage of the sale price and is paid at closing. Be sure to discuss the commission rate with your agent before signing the agreement.
Let the Shelhamer Group Help You Sell!
If you’re thinking of selling your home and you’re not sure if an open listing agreement is right for you, the Shelhamer Group can help. We have years of experience helping sellers in the Los Angeles area and we would be happy to answer any of your questions. Contact us today to discuss your options!
