Updated July 27, 2022
An exclusive right-to-sell listing agreement is a contract from a seller of real estate that gives a real estate agent the sole right to procure the sale. The agreement outlines the real estate agent’s compensation, which is usually based on a percentage (%) of the sales price at closing, along with other terms and conditions. The typical agreement lasts between six (6) to twelve (12) months to allow the real estate agent to make the necessary investments to market the property.
Property Disclosure Statement – This should be completed by the seller at the time of signing the exclusive right to sell agreement. Allows the seller to explain any defects on the property along with any other State disclosure requirements.
What is an Exclusive Right-to-Sell?
An exclusive right-to-sell agreement is the “gold standard” for an agent when establishing a contractual relationship with a seller. It requires the seller to pay a commission to the agent whether or not the property is sold by the seller’s efforts or any other individual during the agreement’s time frame. Due to these benefits, most prominent real estate agents will require that they only agree to exclusive relationships.
As a negotiating tactic, the seller may attempt to get an Exclusive Agency Agreement or Open Listing Agreement that allows the seller to find a buyer without paying a commission or to hire other agencies respectively.
Exclusive Right-to-Sell vs Exclusive Agency
Exclusive Right-to-Sell – The agent is owed a commission no matter how the property sells.
Exclusive Agency – The agent is owed a commission only if they find the buyer. If there is another agent that presents a buyer to the seller, in most cases, the seller will be required to use their agent. Ultimately, it is decided on what is written in the listing agreement between the seller and agent.
How to Get Exclusive Listings
Obtaining an exclusive right-to-sell agreement is always a challenge no matter how seasoned the agent is at their abilities. Often, the agent will have to show “extra value” to the owner to merit their right to a commission no matter how the property is sold. The following is a step-by-step guide on how to get listings and have sellers authorize exclusive agreements:
Step 1 – Get in the Mindset
This means thinking 24/7 about real estate while mentioning to all friends, family members, and former colleagues that you are an agent and looking for work. Begin by making professional business cards, using high-quality material, and distribute them to as many individuals and associates in the industry as possible.
Step 2 – View Expired Listings
The most common thing for an agent to do is look up expired listings in their local multiple listings service (“MLS”). If the agent is a Realtor®, he or she should have access to their local MLS and be able to search expired listings which are properties that are no longer under a listing agreement with an agent and the property did not sell. Therefore, it’s best to contact these property owners and request an appointment to offer your services.
Helpful Tip – These homeowners will most likely be getting flooded with calls from other agencies. Therefore, it’s best to use some alternate selling strategy or method to get the homeowner’s attention.
Step 3 – Always be Looking for FSBOs
Always be on the lookout for the infamous FSBOs (For Sale By Owners). In recent years, with websites such as Zillow and Trulia, there has never been a better time for a homeowner to be on an equal playing field with the real estate agent.
Although, even without hiring a listing agent, a homeowner can still be liable to pay a commission if the buyer has hired representation. The seller is not contractually obligated to pay for the buyer’s agent, although in accordance with common real estate practices, they may be coerced into splitting the fee and pay 2-3%.
Helpful Tip – When cold-calling a FSBO, only request to meet with the property owner. Trying to sell one’s services over the phone is commonly viewed as an amateur mistake in the industry. Just be yourself and request an appointment that will at least give the homeowner an idea of what other properties have sold for in the immediate area.
Step 4 – Advertise Your Services Online
This depends on the agent’s internet savviness and willingness to learn the in’s and out’s of online marketing. At the very least, the agent should have a profile on their agency’s website where they have their contact information listed. In addition, the agent should attempt the following marketing strategies:
- Google Ads – Formerly known as “AdWords”, make an ad and enter the keywords you would like to target. For example, if you wanted to advertise for the search term “looking for a real estate agent in Lexington, Kentucky” you could direct the user, if they click your ad, to a contact page that lists your services.
- Facebook – Facebook is more for advertising based on market areas and groups. For example, if you wanted to advertise to all Facebook users in Lexington, Kentucky of your services, you would be advertising whether or not you know the user is looking to buy or sell a home.
- YouTube – Making videos and publishing them on YouTube is another option to obtain free traffic. Make a video about your local area and describe the different neighborhoods, pricing, and economic conditions can be a good way to get outreach to buyers unfamiliar with the area.
- Writing Blog Posts – Writing blog posts about current conditions can be a good way to get free traffic to the agency’s website to promote your services. If there isn’t, for example, a “market report” stating the monthly residential home sales in your area it may be a good idea to be the trusted resource for providing this information.
Step 5 – Retrieve Government Records
There is more public information available at their local city/town hall than most people think. Any individual, no matter their affiliation to the person or the property, may be able to find advanced details related to the following:
New Construction – Go to the local planning or building department and request to view any new residential development applications for new construction or remodeling that have been submitted in the last 12 months.
Homeowners Behind on Property Taxes – The first sign of an owner in financial trouble is not paying their real estate taxes. In most cases, the city or town will place a lien on the property so the owner will not experience any immediate financial consequences. Although, this also makes for a telltale sign that an owner may be ripe for wanting to sell their property.
Divorcing Couples – Divorcees are commonly looking to sell their property. Most couples, when divorcing, can no longer afford to pay the mortgage payment with only one (1) income.
Step 6 – Offer Staging Services
Staging a property is when the agent offers to rent furniture and make the home more “family-friendly” to appeal to more buyers. In addition, the agent may offer to provide lawn care services and make the extra effort to get every extra dollar out of the potential buyer. Any additional investment that the homeowner can see the agent is making will improve the chances that they should be owed the commission in the event the property sells.
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As defined by the National Association of Realtors, an exclusive right-to-sell listing agreement is a contract between the listing agent and the owner of the home, wherein the seller agrees to compensate the agent's efforts regardless of who ultimately brings forth a buyer.What is the difference between an exclusive listing and an exclusive right to sell? ›
The primary difference between exclusive agency and exclusive right-to-sell relates to commission fees. In an exclusive agency listing, the seller only pays fees if the agent sells the property. In an exclusive right to sell agreement, the seller must pay realtor fees regardless of if the property is sold.How do you fill out exclusive rights of sale listing agreement in Florida? ›
Here. You put broker here is where you'd write the brokerage. Name so our brokerage would be msWhat is the definition of exclusive right to sell? ›
Exclusive Right-to-Sell Listing: A contractual agreement under which the listing broker acts as the agent or as the legally recognized non-agency representative of the seller(s), and the seller(s) agrees to pay a commission to the listing broker, regardless of whether the property is sold through the efforts of the ...