Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
Imagine you’re selling your house for sale by the owner. You’ve been in contact with a broker representing potential buyers. Therefore a broker may send you a real estate One Time Showing Agreement form. But you’re not a real estate broker or a lawyer. So seeing a document like this is daunting. To help you out with that, we’ve come up with everything you need to know about a One Time Showing Agreement. This way, they’re easy to understand. If a buyer’s broker has sent you this document, it’s time to get into the details. It’s time to learn what it is before you sign it and send it back. So in this article, you’ll learn what they are, when and why brokers use them. But also how they affect you as the seller.
We will discuss what you can expect to see in one to make sure the one you’ve gotten is complete.
So if you want to learn everything there is to know about One Time Showing Agreements form, then let’s get started!
A One Time Showing Agreement form is an agreement between the buyer’s broker and the homeowner listing the property for sale. In the document, the broker will list people’s names that they plan on showing the property. Those buyers may potentially put in an offer and purchase the property. The agreement’s main point is that it ensures the seller will pay the broker’s commission if they sell the property to one of the buyers named within the agreement.
Basically, a One Time Showing Agreement form protects the buyer’s broker by ensuring there is a contractual agreement that the seller will pay them their commission if one of their clients purchases the home. Let’s take a more detailed look at when brokers use them and how they work.
Brokers use One Time Showing Agreements when the property in question is off the Multiple Listing Service (MLS), and the homeowner is selling the home. This is because homes and properties listed in the MLS provide brokers representing homebuyers their commission differently. As mentioned above, the agreement ensures that the buyer’s broker will receive a commission on the sale. This is because the contractual co-commission of homes listed in the MLS does not protect them.
We are not going into too much detail on what the MLS is or how it works. The MLS does not require any separate commission for homes listed due to the contractual agreements within the MLS itself. And because of that, brokers do not use One Time Showing Agreements for those properties.
The short answer to this question is yes. The seller does still have to pay the buyer’s commission. But let’s dig a little deeper. Technically the seller
doesn’t have to pay the commission for the buyer’s broker if they don’t want to agree to the One Time Showing Agreement. But then good luck getting any brokers to show your house to potential buyers, as buyers rarely agree to pay their own broker’s commission.
This is because the vast majority of homes are listed for sale (over 95%) or using a broker or within the MLS. Both of these methods will conclude with the seller paying the commission of both brokers. So if a seller decides to list their home for sale by owner, there is no contractual co-broker agreement that ensures both brokers will receive their commission. This is why a One Time Showing Agreement is used, and the seller signs the document in agreement to pay the buyer’s broker’s commission.
Without the seller signing a real estate One Time Showing Agreement and agreeing to pay the broker’s commission, the broker has no incentive to show buyers’ property. And without brokers showing the property to buyers (since they have no contractual assurance that they will get paid), the seller will have very little chance of actually finding a buyer in a decent amount of time.
So there’s a much longer answer to the question. The seller will have to pay the broker’s commission with a One Time Showing Agreement!
Brokers draft the agreement from their standpoint and the agents themselves, directed towards the seller. It will start by addressing you as the seller before naming themselves (brokerage and agent) and mentioning the agreement’s name (One Time Showing Agreement) within the introduction. After that, you will see the typical legal jargon you would expect to see in any contractual agreement.
One agreement may slightly differ from another in terms of the exact wording. Some general topics are recurrent. The most important aspect is that it lists the potential buyers’ names that the broker is planning on showing the property to. The agreement might also indicate that it also applies to any other explicitly related people who may purchase the property. Continuing, you’ll have to recognize the expected things, such as:
Again, you may find some different information and likely some more legal jargon within the agreement. However, these are the things that you’ll almost definitely see within a One Time Showing Agreement!