What Is an Exclusive Listing?
An exclusive listing is a type of real estate listing agreement in which a property seller appoints and specifically authorizes one real estate broker to act as the seller's sole agent. By contrast, in an open listing, the seller retains the right to employ any number of brokers as agents.
- An exclusive listing is a type of real estate listing agreement in which one broker is appointed as the seller's sole agent.
- In an exclusive agency listing, the seller retains the right to sell the property, with no obligation to the broker.
- With exclusive right-to-sell listings, the broker receives a commission regardless of who sells the property.
How an Exclusive Listing Works
A listing agreement is a contract under which a property owner (as principal) authorizes a real estate broker (as agent) to find a buyer for the property on the owner's terms, for which service the owner pays a commission.
To understand how an exclusive listing works, it's helpful to first consider open listings. In an open listing, the seller retains the right to employ numerous brokers as agents. The seller is obligated to pay a commission only to the broker who successfully produces a ready, willing, and able buyer. If the seller finds a buyer without the help of any of the brokers, the seller is not obligated to pay a commission to anyone.
An exclusive listing works differently. In an exclusive listing, only one broker is specifically authorized to act as the exclusive agent of the seller. That means one broker has the sole right to market, show, and sell the property; other brokers are excluded from trying to sell the property while the agreement is active.
An exclusive listing can be simpler for the seller in that there's only one broker to work with. However, an exclusive listing can result in less exposure for the property and, in turn, fewer interested buyers.
Types of Exclusive Listings
There are two types of exclusive listings:
1. Exclusive agency listing
One broker is appointed to act as the exclusive agent for the seller. The seller retains the right to sell the property, with no obligation to the broker. However, the seller is obligated to pay a commission to the broker if the broker is the procuring cause of the sale.
2. Exclusive right-to-sell listing
This is the most commonly used real estate contract. With this type of listing agreement, one broker is authorized as the sole seller's agent and has exclusive authorization to represent the property. While the listing agreement is in effect, the broker receives a commission no matter who sells the property.
In Canada, an exclusive listing is what is referred to in the U.S. as a pocket listing or off-market listing. A single broker handles this type of listing, which is not made available to the general public or listed in the multiple listing service (MLS). Instead, the broker tries to sell the home to their existing private network. Sellers who ask for a pocket listing generally do so to maintain privacy (think: the rich and famous) or to sell to a specific person.