What is an open listing in real estate?
In real estate, open listings are listings where the seller has not signed a listing agreement with any single agent. Instead, an open listing allows for the buyer to attract several different brokers or agents who can try to find a buyer for them.
If a buyer is found, the broker or agent is paid a buyer's agent fee (usually 2.5-3%). If the seller finds the buyer themselves, without an agent, no commission is paid.
In real estate, you can list your house using an exclusive listing or an open listing.
An open listing is used by for sale by owner (FSBO) sellers who are looking to sell fast. An open listing means the seller has not signed with one real estate agent. It also means you don't have a listing agent. Instead, multiple agents will bring a buyer to show your home, and multiple brokers can market your home to potential buyers.
If a sale is successful, you pay the 2.5-3% buyer's commission to the agent or broker who found you a buyer. If you find a buyer yourself, you don't pay a fee.
By contrast, a home with an exclusive listing can only be shown by one real estate agent or brokerage.
Open Listing Agreement Definition
An open listing can be shown by any number of different agents. An open listing is most often used in one of three circumstances:
- An owner needs to sell very quickly and is urgently seeking a buyer
- An owner has had a hard time selling with an agent and wants to manage the sale themselves
- An owner is doing a FSBO sale, has a real estate background and can represent themselves
If you don't have a background in real estate, we don't recommend you sell your home yourself. FSBO sellers do save a good amount of money in commission fees, but this can be offset by a lower home price or not knowing how to negotiate a solid offer in their favor.
We also don't recommend going with a traditional 2.5 or 3% agent. We think those commissions are far too high, which is why Home Bay has partnered with Clever Real Estate.
Clever is a free service that operates nationwide and can match you with top-performing local agents who can help sell your home for just 1%. You'll save thousands in fees without any of the DIY headaches of selling FSBO.
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Selling FSBO is hard. But our friends at Clever Real Estate make it easy to find a trusted local agent AND save thousands on your next home sale. When you find an agent through Clever, you'll get full service while paying just 1% in listing fees. That's $8,000 in savings on a $400,000 house!
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Exclusive Listing Definition
To list your home on the MLS, you must work with a real estate agent or broker, who pays annual fees to have access to and to be able to list on their local MLS. Listing your home on the MLS can be achieved by hiring a real estate agent, low commission brokerage or flat fee MLS service.
When you begin working with an agent, before your home is listed, you’ll be asked to sign an exclusive listing agreement. This agreement will state that you allow your agent or broker to list your home on your behalf. It will also outline and define any commissions or fees you agree to pay once your home has been sold.
Exclusive listing agreements can have timelines and are legally binding. It can be difficult to get out of a listing agreement.
Similarities Between Open Listings and Exclusive Listings
- Both exclusive listings and open listings are viable ways to get your home listed and in front of buyers.
- Both listing types require the seller to sign a listing agreement, which defines all the terms of the sale.
Open Listing Agreement vs. Exclusive Listing Agreement
- Exclusive listings require you to commit to one agent or broker, an open listing does not.
- Exclusive listings are much more popular than open listings and most sellers opt to use exclusive listings by signing with a single agent.
- Open listings are not published on the MLS, but in most cases, sellers want them to be so they get more buyer exposure. This can be accomplished by hiring a discount broker or using a flat-fee MLS service.
- Open listing agreements don’t provide sellers with any sort of support or representation throughout their transaction. If a seller needs support, it has to be purchased through a third-party service.
Cons of an Open Listing Agreement
FSBO sellers often default to open listings, but there are two major drawbacks to consider.
Real estate agents solicit business to open listings, so sellers looking for qualified buyers often waste a bunch of time dealing with agents trying to sell them. Some agents even use a misleading pitch to try and get a face-to-face meeting.
Buyer agents tend to be hesitant to work with open listings because rules about commission get a little fuzzy. As we explained above, with a traditional or MLS listing, the agent knows exactly what their commission will be.
It's not so clear cut with an open listing, which can be a turn off to buyer agents. Agents also tend to be hesitant about open listing sellers because their transactions are often more difficult and time-consuming.
Sell Faster With a Low Commission Agent
If you’re thinking about a FSBO sale, don’t fuss with open listings or with the process of getting your listing on the MLS using a third-party service. Instead, ditch the DIY process and use a service that can match you with a good agent who won't charge an arm and a leg in commission fees.
Our friends at Clever can match you with hand-picked, top-performing local agents who can help sell your house for $3,000 or just 1% for home sales over $350,000. You'll get the full service of a traditional agent at a fraction of the common 2.5-3% fee — and no cut corners.
💰 Incredible Savings, None of the DIY
Selling a house by yourself is HARD. That's why we've partnered with Clever Real Estate, a free service that matches you with trusted agents AND helps you save thousands. You'll get full service for just 1% in listing fees, meaning you'd save $8,000 on a $400,000 home sale. Learn how much you can save today!
💡 Sell with Clever, save THOUSANDS in agent fees! 💡
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