Having More than One Real Estate Agent When Selling Your Property is Not Always Better

First of all, here are some things you should know about listing agreements.

Definition of Listing Agreement

An agreement, preferably written, whereby a property owner agrees to offer to sell property at a stipulated price within a defined period of time and which authorizes the listing real estate broker to solicit offers to purchase. The real estate broker who obtains the listing may be paid a fee or commission, either up front or at sale, as provided in the listing agreement. Other brokers participating in the transaction may also be compensated.

There are many types of listings, as well as regional difference. The meaning of the names of types of listings also vary.

Types of Listing Agreements

EXCLUSIVE AGENCY - A real estate employment contract in which a seller hires a broker to list his or her property for sale, with the understanding that the seller retains the right to sell the property directly to a buyer not produced by the broker without paying a commission. The listing broker may publish the listing in the MLS and cooperate with other brokers to sell the property. The nature of the listing must generally be disclosed, because it places cooperating brokers at risk of losing a client to the seller.

EXCLUSIVE RIGHT WITH EXCEPTION - Typically this is a listing in which the seller reserves the right to sell, without owing compensation, to a particular buyer or buyers with whom the seller has had previous contact. The exclusions are required by the MLS rules to be disclosed to agents in the agent (private) remarks.

EXCLUSIVE RIGHT TO SELL - A real estate employment contract in which a seller hires a single broker to list his or her property for sale. The broker may publish the listing in the MLS and cooperate with other brokers in the sale. The broker is entitled to receive a commission regardless of who actually sells the property. For example, if the sellers decide to sell to a friend or relative, the broker would still be entitled to a commission.

NET - A listing of real property that permits the listing agent to keep any consideration received over an amount guaranteed to the owner. This practice is fraught with ethical quandaries, so much so that such a listing arrangement is illegal in some states.

OPEN - A listing of real property wherein more than one broker is permitted to offer a property for sale under separate listing agreements.

If I am correct, OPEN listings are common in the Philippines where a seller can work with multiple agents. The agent or agents who bring in the buyer earn and/or split the commission. There is no exclusivity in this arrangement. In other words, the agent is not "really" motivated enough to invest time and money marketing the property since another agent may end up selling the property anyway. This arrangement reduces market exposure which is not favorable to an owner trying to sell.

A good and smart agent/broker will insist to have an EXCLUSIVE RIGHT TO SELL. The seller can then expect and demand a comprehensive marketing plan from the agent. The agent should be willing and ready to invest in DILIGENTLY promoting the listing which leads to better market exposure. The seller can then easily cancel the listing agreement if the agent is not performing.

The Seller benefits from better services and market exposure. Agents end up selling more and earning more. It's a win-win solution.

IMHO, the argument of having more than one real estate agent is better is bogus. Working with a bunch of non-motivated and unsavvy agents means inefficiency. Working with one serious marketing professional delivers results.

Non-exclusivity is one of the common reasons why a lot of listings don't have the property address displayed and advertised. When you asked the agent why, you'll find out that hiding the address protects them from other agents who might directly solicit the property owner. If you really want to sell a house, why make the exact location invisible?

Now you know why many buyers complain about listings that are advertised with incomplete and limited information, lack pictures and so forth. This happens a lot especially in the resale market. Non-exclusivity leads to client-stealing, lower commissions, unprofessionalism, disservice to the consumers and unsatisfied customers. It is simply a dysfunctional system.

So whom would you list your home with? To a single but serious agent that will work and spend for maximum exposure or to a dozen that will simply roll the dice and take their chances that perhaps a buyer will come along while making the listing confidential (property address hidden to the public)?

And to the real estate professionals out there, are you ready to educate your sellers and sell more properties or would you just keep rolling the dice?