What Is An Exclusive Contract With A Real Estate Agent?
February 27, 2022
If you’re looking to buy or sell your home, then your real estate agent may ask you to sign an exclusive contract with a real estate agent.
Exclusive contracts are necessary in a lot of scenarios because they give both the client and the real estate agent assurance that each party will get what they are looking for. They could be seen as an insurance policy for real estate agents and their clients. Here is everything you should know about exclusive contracts with real estate agents.
Having An Exclusive Contract With a Real Estate Agent Means…
Signing an exclusive contract with a real estate agent means that the buyer/seller is consenting to work with a certain agent exclusively for a period of time.
If they don’t buy or sell within that time frame, then they have the option of either extending the contract or finding another agent to work with. An exclusive listing agent works with sellers and exclusive buyer’s agents work with home buyers.
What Does An Exclusive Contract Mean For Buyers?
One of the main benefits of a real estate agreement is that the buyer’s agent is assured that they will be given a commission whenever you buy a home. As a result, the agent can work without concern and put all of their focus on helping you buy a home.
Buyer-agent exclusive contracts not only give the agents piece of mind about getting paid, but they also provide clarity to the expectations of the buyer-agent relationship. There is a period of time in the contract that you’ll have to buy a house in and stipulations that protect the buyer just as much as the agent.
Your Broker-Buyer Contract Needs To Cover Both Parties
When it comes to the broker-buyer contract, you can’t assume anything. Review the terms and conditions in the agreement and make sure you understand the responsibilities of a good real estate agent before signing. Here are a few stipulations to consider including in the contract:
- The real estate agent’s responsibilities.
- The terms of agreement cancellation if the real estate agent is not effective.
- You should also look at how long the agreement will be active. Whether it will terminate automatically in 3 months or will it be auto renewed?
Be specific the requirements you want to be covered in the contract, and make sure to read the tiny print carefully to ensure that you understand what you are agreeing to.
If you have any concerns regarding the agreement, try seeing a lawyer who could explain what you’re signing. When it comes to contracts, don’t make any assumptions.
Types of Listing Agreements With Sellers and Agents
A listing agreement is a contract that homeowners can use with real estate agents or brokers when selling their house. They are defined as a contract made between property owners and brokers or agents to act on the behalf of the homeowner in a house sale.
Signing an exclusive contract with a real estate agent means that you are granting them the exclusive rights to sell your property. The benefits of an exclusive contract include:
- Lower commission payment.
- Maximum exposure to your property as the exclusive agent has better control over marketing strategies.
- Only high-quality offers.
- Simplified negotiation, which automatically means less haggling.
Here are a few different types of listing agreements sellers can use.
Exclusive Right-To-Sell Listing
Signing an exclusive right-to-sell agreement means that you are granting a real estate agent the sole right to sell your property. What this means is that the buyer cannot work with any other agent or broker as the contract is active. Even if you get an offer for your property through your own efforts, say through a Facebook ad or reference from a friend, you will still be liable to pay commission to the agent.
Exclusive Agency Listing
An exclusive agency listing agreement is a contract between a broker and a seller that authorizes the broker to be the sole agent representing them. Like many listing agreements, if the seller can sell the house on their own but they will still be obligated to pay the commission.
An open listing is a nonexclusive type of listing agreement. The agreement gives the seller the right to work with any amount of brokers or agents to sell their property. The seller only has to pay the commission to the broker or agent that finds a buyer to the sell the property to.
How Do You Find Good Real Estate Agents?
Before signing any contract with a real estate agent, you have to make sure that the real estate agent is good at what they do. Working with a real estate agent that isn’t as effective and committed could make the real estate transaction a lot harder. You could end up paying a lot more than what you budgeted for, the real estate deal could be riddled with problems, and you could even could have legal issues.
Negotiators consist of the best real estate agents that have years of expertise and a lot of knowledge about the real estate market. They are known to go above and beyond for their clients to get them the best deal possible. Find your local Negotiator here.