When selling your home by open listing an open listing agreement is entered into with a number of real estate agents at the same time and the real estate agent who introduces the purchaser and holds the deposit is entitled to the commission on the sale.
Many property owners think that by signing an open listing agreement on their property it creates competition between real estate agents and that is the best way to sell their property. In actual fact nothing can be further from the truth.
Open listings take longer to sell and the success rate of acheiving a sale under an open listing is only a fraction of an exclusive agency.
Remember that real estate agents do not get paid unless they successfully close a sale so if the chances of achieving a sale are much less and then its split amongst 4 or 5 agents how much time and commitment will one agency invest in your property.
Even when a real estate agent receives an offer from a prospective purchaser on an open listing he does so under the knowledge that another agent could present an offer to you at any time. This causes some real estate agents to “race” the offer to you without investing sufficiently in negotiating on your behalf as they can afford with an exclusive agency.
Potential purchasers generally believes that if an owner has a property listed with multiple agencies at the one time then the property may be over priced and difficult to sell. This can translate into a reduced selling price and low ball offers.
Think about your own experiences. What does it look like when a home has 4 or 5 different agency signs on their front lawn? These days with the internet buyers are quickly aware that a property is listed with every agency in the area.
Answer these questions :
- With an open listing can you be certain they will invest the required time to make sure the buyer pays the highest price for your home?
- Will an the real estate agent rush the negotiations to lock in a sale if he knows somebody could beat him and he earns nothing?