What Is An Open Listing?
An open listing is a non-exclusive listing agreement that grants a homeowner the right to work with several different brokers at the same time. Additionally, they are allowed to sell their home on their own, which is also known as a “for sale by owner” (or FSBO) listing. The seller is only obligated to pay real estate commission to the broker who brings them the buyer whose offer is accepted. If the seller finds the buyer themselves, they are not obligated to pay any brokerage fees.
This type of listing contract can be beneficial for a home seller because they are able to market their home to multiple brokers’ networks as well as their own. It also gives the seller a great amount of control over their home sale. On the other hand, people who are selling their homes through an open listing may not receive as much support as people who sign exclusive agency or right-to-sell contracts.
How Does An Open Listing Work?
In an open listing agreement, a home seller is allowed to work with a number of agents to find potential buyers for their property. An open listing agreement contract establishes the listing broker as a non-agency representative of the seller, meaning that they do not have a fiduciary responsibility to the seller or the buyer.
The property owner agrees to pay a commission to the listing agent broker only if they bring them the buyer whose offer they accept. If the seller finds a buyer for their house on their own, they are not required to pay the agent or broker a real estate commission.
How Are Open Listings Different From Other Real Estate Listings?
Here is a range of other types of listings in real estate and how they differ from open listing agreements.
- Exclusive right-to-sell listing: An exclusive right-to-sell agreement gives the broker or real estate agent exclusive rights to earn a commission for the sale of a property. It is the most commonly-used agreement used when selling and listing a home. Unlike an open listing agreement which allows a seller to work with multiple brokers, an exclusive right-to-sell agreement obligates the seller to work with one agent. The agent or broker collects a commission on the sale, even if the homeowner finds their own buyer. Exclusive agency listings are often better for sellers who want more support from their agent and don’t require as much control in the sale of their house.
- Exclusive agency listing: An exclusive agency listing is an exclusive contract that limits a homeowner to working with one broker. However, the seller in this type of agreement is not obligated to pay their broker a commission if they find the final buyer themselves, similar to the agreement in an open listing. Exclusive agency listings also usually offer a bit more hands-on support than open listings, because the broker or agent has more of a stake in the sale.
- Net listing: In a net listing, the broker reserves the right to keep the difference between what the homeowner wanted to sell the home for and the actual price the house sells for. This is a risk for the broker who may not receive any commission if the home sells below the asking price. This arrangement is less of a listing agreement and more of a method of assigning an amount of commission. In most open listings, the seller will pay the agent who sells their home a commission based on the final selling price of the home.
- Multiple listing: A multiple listing agreement is an agreement in which an owner’s home appears on multiple listing service (MLS), which is a digital database where brokers and buyers can find homes that are currently for sale. MLS listings usually require the seller to work with an agent or broker to list their home on an MLS. If a seller is not working with a broker, they can pay a fee to have their home listed on an MLS.
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