Non-Exclusive Listing Agreements

By Derek Shropshire
Non-exclusive listing agreements allow the seller to market her own house.

House For Sale image by TMLP from Fotolia.com

Listing agreements grant the real estate agent the right to sell property and in turn, receive a commission upon the completed sale. Listing agreements are either exclusive or non-exclusive. Exclusive listing agreements grant the real estate agent the right to a commission, regardless of who sells the home or property. With non-exclusive listing agreements, the real estate agent receives a commission only if he sells the property or home.

Benefits for the Owner

A non-exclusive listing agreement is beneficial for the seller because she is not tied to an all-inclusive contract. She can still market her home or property without the obligation of paying a commission when the sale of the home or property is completed. In addition, non-exclusive listing agreements enable the owner to list their real property with as many real estate agents as they wish and only have to pay commission to the agent who completes the sale. Listing with different agents simultaneously can give the home or property excellent exposure to the market.

Disadvantages for the Owner

Non-exclusive listing agreements can also be a detriment. When the real estate agent is not granted the guarantee to a commission, he is unlikely to market the property as efficiently as he would a property he has listed exclusively. In fact, some real estate agents will not even market a property they have listed non-exclusively. Instead, the agent will only use word-of-mouth to market the property to potential buyers through whom he has came into contact by other marketing methods.

Benefits for the Real Estate Agent

Non-exclusive listing agreements are also an advantageous tool for real estate agents when used correctly. Agents who find a for-sale-by-owner house that matches the requirements of a buyer they are assisting can use a non-exclusive listing agreement to show the house to a buyer and still guarantee himself a commission--owners are normally less reluctant to pay a commission when they are still granted the right to sell the house themselves. In addition, a non-exclusive listing agreement can give the agent a chance to prove their abilities and eventually procure an exclusive agreement.

Disadvantages for the Real Estate Agent

A non-exclusive listing agreement can be detrimental to a real estate agent's business, especially if the agent spends money to advertise and market the listed property. When an agent advertises a non-exclusively listed property, she runs the risk of the owner or another agent selling the property, which, in turn, leaves her no means by which to recoup the advertising and marketing fees. It is for this reason that many agents will not use non-exclusive listing agreements.

Avoiding Pitfalls

Non-exclusive listing agreements must be handled with care by both the agent and the owner, because the possibility for turmoil exists. A buyer can be shown the house by an agent, only to complete the sale with the owner and vice-versa. To avoid a potential conflict, it is imperative for the owner and the agent to keep a log of everyone they talk to about the sale of the house; include names, dates and times in the log. Doing this will prevent the majority of pitfalls with a non-exclusive listing agreement.

About the Author

Derek Shropshire has been writing for hotel websites such as econo-gatlinburg-hotel.com and locationgatlinburg.com since 2007. Shropshire has experience in real estate, and has managed a hotel since 2005. He graduated summa cum laude from Walters State Community College, earning an Associate of Science in general studies, and is currently an English major at the University of Tennessee-Knoxville.