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.
Real estate never ceases to amaze people with the sheer number of different terms they have as part of the regular day-to-day occurrences. One of the more common terms you might hear is an “open listing” agreement in New York real estate. If you’ve ever wanted to buy an open listing or sell a home, you probably asked what an open listing is and how it could affect the sale. Don’t worry! It’s a lot simpler than you think. An open listing is a property listing where the owner has not agreed to list with any broker exclusively. However, the owner has decided to allow brokers to list the property on a non-exclusive basis.
The broker will only collect a commission if they find a buyer or tenant. Therefore the owner can always find their buyer and not owe any commission.
An open listing means a home is for sale with a non-exclusive contract with a brokerage. Having an open listing means that the owner might have the option of making an FSBO sale while the home gets listed for sale via a brokerage, and this cuts down on commissions paid. Sometimes, a home seller might do an open listing with multiple brokerages to help spread the word about a home faster.
If the listing gets sold while an open listing has multiple brokerage agreements, the home seller will only have to pay the brokerage and real estate agent who sell the home, and all others are unpaid.
With a typical listing, owners don’t have the right to find the seller, nor can they sell the home independently. They follow an exclusivity clause, meaning they are stuck with a specific real estate agent for the sale duration (or a set number of days, whichever comes first).
Any sale in a traditional listing must go through the real estate agent. In an open listing, sellers eliminate the exclusivity clause with the sale hire agreement.
This means the owner can find and sell the home themselves if they choose to. They also can hire as many real estate brokers and agents to sell the listing as possible.
It can make a lot of sense for many buyers. Open listings are great for sellers who want to sell the home fast or save money on potentially selling agents’ commissions. However, they’re not always a good choice. Many real estate agents and brokerages won’t work with open listings simply because they feel like it’s a waste of time.
People who want to sell the home fast and are focused on raising awareness ASAP should consider having an open listing. This usually refers to emergency sell-offs from significant life events like divorce or bereavement in NYC.
Otherwise, you probably will get better service with an exclusive contract (i.e., “exclusive right to sell”). Exclusive contracts (i.e., “exclusive agency listing”) ensure that your agent remains focused on your listing. Besides, having an agent work exclusively for you takes most of the hard work out of your hands.
Open listings are relatively simple to work with. The following is what both sellers and buyers must know:
You might hear these two phrases used heavily. They’re not the same thing as a fully open listing. Sometimes, brokerages may try to persuade you into one of these exclusivity clauses. If you want to make an open sale, you might not want to agree to either.
Not all real estate agents and brokerages dislike open listings, but some do. However, there are several reasons why many agents run the other way when they hear about a new open listing. The most common causes include:
New York City does not have a law that says all agents have to agree to represent people who come asking for help. This includes open listings. However, this doesn’t necessarily mean that the real estate agent you want to hire has the right to make that decision.
In many cases, it’s not up to them; instead, it’s a decision made by a broker.
Due to the high risk of time-wasting, many brokerages have policies that ban all agents working from the firm from taking up an open listing. If the real estate agent you want works with an exclusive-only brokerage, you must choose between an exclusive contract and a different agent.
Sometimes it is, but it’s an issue entirely dependent on your particular situation and the market you want to reach. An honest broker or agent is the best person to ask about this matter, and they’re the ones who see the market and understand New York City’s unique sales climate.
You’ll find excellent advice at your fingertips if you choose the right people.