What Is an Open Listing?
An open listing in real estate is a property for sale which may be shown by multiple real estate agents. The agents compete to find a buyer for the property.
The open listing is the opposite of an exclusive listing, in which a real estate agent is engaged by the property owner with the understanding that the agent has the sole right to represent the owner and sell the property.
When the listing is open, the agent who makes the sale is paid the commission, not the listing agent. If the homeowner finds a buyer without the assistance of an agent, no one is paid a commission. If the agent has an exclusive right to sell, the agent earns a commission regardless of who sells the property.
- Home sellers may have the option of offering a real estate agent an exclusive listing or an open listing.
- An open listing allows other local real estate agents to compete to find a buyer for the property.
- An exclusive listing gives the sole agent an incentive to work hard for the sale.
- An open listing offers the possibility of more showings and wider interest in the home.
Understanding an Open Listing
An open listing is also referred to as a listing agreement on a nonexclusive basis. Agents who directly participate in selling this property, including the listing agent and the selling agent, are entitled to a share of the commission if it ultimately leads to a sale.
Sellers who are hoping for a quick sale may opt for an open listing. If they don't attract a buyer during the term of the agreement, they may then change to an open listing to get more prospective buyers through the door.
The seller may also hope to avoid paying a commission altogether. That is, if a buyer and a seller make a private deal independently, there may be no sales commission. If it is an exclusive "right to sell" agreement, the agent is still owed the commission. If it is an "exclusive agency listing" agents are paid only if they sell the property.
Real estate agents can be reluctant to take on an open listing, or reluctant to put much work into it because the commission is likely to be split.
The open listing arrangement stands to benefit the seller by offering them access to more agents to sell their property.
Real estate firms may have rules that govern whether their agents may participate in open-listing arrangements. Some firms allow open listings to be accepted but not advertised, although the agents are allowed to engage clients they already have as potential buyers.
The limited potential for commissions incentives agents to focus on exclusive contracts.
What Does 'Exclusive' Mean on a Real Estate Listing?
The word exclusive indicates that the listing for the property is being handled by a single agent. No other agent can show the property or negotiate a sale.
If it is an open listing, any agent can show the property and negotiate a deal.
Is an Exclusive Listing or an Open Listing Better for the Seller?
The seller who offers a real estate agent an exclusive will be getting a representative who is determined to make a sale, and will spend the time and energy necessary to do it.
An open listing may get the property higher visibility. Other agents who see the listing can canvass their own networks of buyers for a possible match.
That said, real estate agents balk at accepting open listings. An exclusive might be the way to go at least initially. If the house fails to sell, consider the open option.
Does an Open Listing Have an Expiration Date?
Most real estate listings have an expiration date, It might be 90 days or 180 days. The expiration date is not very relevant in an open listing, since the contract does not commit the seller to paying a commission to the real estate agent.