Understanding “Exclusive Agency”:Florida Listing Agreement Types

March 24th, 2007 categories: Tampa MLS, Tampa Real Estate, Tampa Realtor, Tips for Sellers

A few days ago we explained the particulars of the “Exclusive Right of Sale Listing Agreement”. The “Exclusive Agency (Brokerage) Listing Agreement” is a different animal and is not used nearly to the extent that the “Exclusive Right” agreement is used.

The Florida Association of Realtors offers Florida home sellers and their brokers the “Exclusive Agency” agreement which gives a brokerage the exclusive right to list a home for sale on the MLS, but it gives the seller the right to also market the home and find a buyer.

If the broker is successful in finding a buyer, the broker is compensated. The broker can list the home on the MLS and still offer compensation to other, cooperating brokerages. However, if the seller finds the buyer through his/her own efforts, no fees are due to the broker.

Scenario #1:

Betty Agent finds the home for sale on the Tampa MLS, shows it to her buyer, buyer buys the home. In this scenario, the listing broker’s efforts helped procure the buyer and the fee is due to the brokerage and split among the 2 cooperating firms.

Scenario #2:

Joe Seller puts a “For Sale by Owner” sign in his yard alongside Lisa Agent’s broker’s “For Sale” sign. Bobby Buyer drives by the home, calls Joe Seller, gets in the home, buys the home. In this scenario, Mr. Seller’s effort sold the home, so no fee is due to the listing brokerage.

This type of agreement works well for the seller who is comfortable representing himself in the sale, but also wants the exposure that he’ll get through listing the home with a brokerage. Another advantage for the seller is that some buyer’s agents may rather work with an agent representing the seller, than work directly with an unrepresented seller.

But from the broker’s/agent’s perspective, there are no guarantees in this type of agreement. The agent may spend a substantial amount of time and money, and put forth a tremendous effort to market the home, but then not get compensated at all. And maybe Bobby Buyer saw the home advertised on Lisa Agent’s website and then decided to drive by and found the “FSBO” sign. There is much more risk to the agent in this type of listing agreement. There is no guarantee and things may get messy. But if the compensation may be substantial, the risk may be a moot point.

The fact is most seller’s are not even aware that this type of agreement exists. Many sellers will just accept the “Exclusive Right” agreement as the standard. Both types have their places.
“Exclusive Agency Listing Agreement” (Sample)

This entry was posted on Saturday, March 24th, 2007 at 12:09 pm and is filed under Tampa MLS, Tampa Real Estate, Tampa Realtor, Tips for Sellers. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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