Ep. 78: The 3 Most Common Types Of Real Estate Agent Listing Agreements

Ep. 78: The 3 Most Common Types Of Real Estate Agent Listing Agreements


Hello everybody, thank you for coming this
week’s video blog here at California Realty Training. So glad to see you. Hoping to bring some good real estate information
to you, so you can take it onto your new real estate career and make things happen. This week’s video blog is going to be on types
of representations for your listings, all right? The one that’s most typical, the one that
maybe you don’t want to touch, the one that, hey, you might think about but let’s get these
things clear, because it can get a little confusing, we’ll try to make it nice and clear
for you. First type of listing agreement that I want
you to be aware of. In fact, this is the one that I want you to
use 100% of the time if possible. Got it? This one’s called the exclusive authorization
and right to sell. I want you to remember that, exclusive authorization
and right to sell. Key term here, key terms, right to sell. Right to sell. Right to sell. What does this listing mean? It means you are the only one who has a right
to sell this property. When you have this listing .. between you
and your seller, you have you and your seller and you guys sign this contract, exclusive
authorization and right to sell, you are guaranteed commission as long as you find somebody who
wants to buy this house. If you find somebody who is ready, willing
and able, you are guaranteed commission. You have this listing, yay. How am I going to sell this listing? How am I going to sell this house? I’m going to put it on the MLS, and I’m going
to offer some of my commission to another agent. If they bring me a buyer, I’m going to give
them some of my commission. That’s called a cooperating broker. Hey, anybody out there who brings me an offer
on my listing, I’ll give you half of my commission. That’s called a cooperating broker. What type of listing? Exclusive authorization and right to sell. I get the right to sell. I have the right and the ability to go out
and share this listing with everybody. At the end of the day, I’m going to get paid. If I want to divide my benefit, if I want
to divide my commission with the cooperating broker, I’m entitled to do so. That’s how it’s typically done. We want to share this listing with the whole
wide world, with the entire real estate community. We want all the agents to bring us an offer. If they do, you’re going to give them, of
course, a share of your commission. That’s called exclusive authorization and
right to sell. Another one that I don’t want you to get confused
with is called exclusive agency. Now, it also has that keyword there, exclusive. Just like the one that we just discussed,
it also has that keyword exclusive, but don’t be fooled. Exclusive agency is different than exclusive
authorization and right to sell. What’s the difference? Exclusive agency, it’s the same type of scenario. You’re the only one that is entitled to sell
it. You are the only one that’s going to be guaranteed
commission when you find a buyer who is ready, willing and able. However, there’s one difference. This difference is huge. This difference is this. The seller, the owner of this property, the
one that just hired you, he can be your competition. If he finds a buyer, he doesn’t owe you anything. If he finds a buyer, or she finds a … If
the owner finds a buyer, they owe you nothing. In reality, they are your competition. If they go to work that day and they happen
to be talking to Joe, their buddy, at lunchtime they’re having lunch. They’re having some sandwiches. They start discussing the sale of his house. He says, “Hey Joe. How you doing? Hey buddy. How you doing?” Having a conversation, “You know I’m selling
my house.” The buddy says, “Well hey. I want to buy it. I’ll buy it. I’ll make you an offer.” The owner made the deal. The owner put this together. The owner found the buyer. You, as an agent, kaput. You didn’t do anything. Because you did sign this exclusive agency
agreement, you didn’t sign the right to sell, you only signed this exclusive agency, the
owner is entitled to compete with you. He did and he won. You might not want to use that contract. Don’t use it, stick to the first one that
we discussed. Another one I want you to be aware of, and
it’s somewhat popular but not used often, but can be, don’t be fooled, know something
about it, is the open listing. Mind you, all these listings are relationships. The stronger the bond, of course, the better
the relationship. Exclusive authorization and right to sell,
the first one we discussed, complete commitment. Complete commitment. There is no competition between the owner
and the agent. The owner says, “Here agent. Take this house, please sell it. It’s all yours.” That’s a beautiful relationship. The exclusive agency, it’s a relationship. It’s solid, but the owners can still compete. The open listing is like, “Hey agent. You’re not the only one I’ll be seeing, huh? I’ll be seeing you and that agent and that
agent.” It’s an open relationship. Who wants to have an open relationship? I don’t know. Maybe some people do, but that’s not the way
it usually works. You want a commitment, especially in a professional
environment like real estate. An open listing is the owner, this is the
one the owner says, “Hey agent. I’ll hire you and agent number two, I’ll hire
you. Agent number three, I’ll hire you. Four, five, six, I’ll hire everybody in this
room who is an agent. I’m only going to pay the one that brings
me an offer. ” Now, do you think they’re all going to go
out and spend money advertising? I mean would you spend advertising if you’re
not guaranteed commission? Of course not. All of these agents who have been hired on
an open listing aren’t guaranteed commission. The majority of the time, they’re not going
to put forth any effort into this relationship. If you want the most secure relationship that’s
extremely binding, and you both understand that it’s going to be a solid commitment from
the day you sign that contract, I want you to consider, and if I were you only use, the
exclusive authorization and right to sell. Keywords there, right to sell. If you don’t see those words, right to sell,
on top of that contract, I wouldn’t use it. Solid relationship creates what? A bond. Bonds create what? Respect. Respect creates what? Success. Understand that you’re both bonded together. There are other types of listing agreements,
these are the three probably most popular ones. The one that’s used probably 99.9% of the
time is the exclusive authorization and right to sell. Got it? Seller says, “Here agent. Make it happen. I don’t want anything to do with it, because
I don’t know what I’m doing.” The second one, of course, is the exclusive
agency where the owner says, “Hey. I’ll sign this one but if I find a buyer,
I don’t need you so I don’t pay you.” The third, of course, is the open relationship
one, the open listing, which is rarely used. If it is … It was offered to me once. I said, “I don’t do those kind of things. I don’t offer that type of listing in my career.” I didn’t use it. I didn’t want to even bother with it. Now, you get to make that decision whether
you’re going to use it or not. Again, which is the best one that’s going
to benefit you? Exclusive authorization and right to sell. Hope this helps understand better the contracts
you’ll be using in real estate career. I’m hoping you all the best, all right? If you have any questions or concerns, give
us a call or leave a down below comment. We would be more than happy to get back to
you. Have a great day, don’t forget to subscribe.

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