Rahul Jindal
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Exclusive listings are commonly referred to as off-market listings or pocket listings. If you see these terms used interchangeably, don't be confused. Some sellers prefer exclusive listings to public listings - especially those who are concerned about their privacy. Buyers looking for exclusive properties or great deals can maintain a great relationship with a real estate broker to access their client's exclusive listings.
In this blog post, I will explain what is an exclusive listing and how it works.
An exclusive listing agreement is a contract between the seller and real estate agent where the real estate agent takes overall sales and marketing activities for the home, bypassing the Multiple Listing Service (MLS). Each exclusive listing is different in terms and conditions. It's very common for sellers to list their property exclusively when they don't want their address to be visible on the internet. Think high-profile or high-net-worth individuals, but exclusive listings have become more common among more modest Toronto households over the past few years.
By now, you probably know that you can’t find exclusive real estate listings on public sites like the MLS. Exclusive listings are private and generally, only the seller’s agent knows about the listing. The best way to find these listings is to improve your relationships with real estate agents and other professionals. There are several ways to do this:
If a homeowner decides to sell their home through an Exclusive listing, they will work with a real estate agent who will not publicly advertise the listing of your home. To find a buyer for an Exclusive listing, your listing agent will look in their network for home buyers they think would be interested in buying. These may be qualified buyers they have worked with before. Unlisted homes can also be sold directly to friends and family, allowing you to avoid other costs associated with a listing.
Since Exclusive listings usually only involve one agent because the listing agent also finds the buyer, you can negotiate for a lower commission at closing. However, sellers use exclusive listings not primarily to save real estate commissions but because they want to hide their home listing from the public.
Politicians and celebrities often use Exclusive listings so that information about their homes is not made public, but ordinary homeowners can use Exclusive listings as well. In a regular real estate listing, anyone can see details about your home such as your home address. From pictures of the inside of your home to showcases to bring strangers into your home, Exclusive listings allow owners to protect their home from being shown to the world.
With Exclusive listing, the homeowner can control who can see your home's listing. Only serious buyers screened by the listing agent will be able to find your exclusive listing. The homeowner may require potential buyers to sign a non-disclosure agreement (NDA) before viewing photos of the home. They may also require buyers to show proof of funds before allowing them to tour the home or know the home address. This helps weed out people who aren't seriously planning to buy.
Exclusive listings keep your home off the MLS, which can be useful in certain scenarios. If your property is particularly expensive, which can take longer to sell, keeping your property listed for too long can reduce purchase offers. Being off-market can also increase the days your property is on the market, so that people not involved in the transaction can't see it.
If you're not sure what price to list your home at, such as if it's an exclusive property with an unclear price, an Exclusive listing lets you receive offers from buyers without having to publicly set an asking price. If buyers' feedback suggests a lower price is needed, you can easily lower your asking price without making it public. You can also convert your Exclusive listing to a regular listing and open it to the public at any time.
There are many differences between exclusive listing and non-exclusive listing. Before going to know about the difference, first we read about the types of listing agreements.
Exclusive Sales Rights Listing: This type of listing agreement ensures that the real estate agent receives a commission for the sale of the property, regardless of whether it is sold by the agent or the property owner.
Exclusive Agency Listing: In an exclusive agency listing, the real estate brokerage is only compensated if they are helping to sell the property. If the property owner sells the unit without the help of an agent, there is no commission.
Open Listing: An open listing agreement allows sellers to work with multiple agents. However, the seller is not obligated to pay any real estate broker unless they have played a significant role in facilitating the real estate transaction.
Net Listing: In a net listing, the real estate agent has the right to keep the amount above the owner's desired selling price as their commission. This is illegal in some states in the United States. In Canada, while there are no clear laws regulating net listings, real estate agents who push clients into agreements to maximize their commissions risk losing their trading license. What I am trying to say is, be careful with net listings!
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Basic of comparison |
Exclusive listing |
Non exclusive listing |
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1 |
Agent Representation
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Only one real estate agent or brokerage represents the property. |
Several real estate agents or brokerages may represent the property and attempt to sell it.
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2 |
Marketing Efforts
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A single agent typically invests more in marketing, including professional photography, online advertising, and open houses.
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Marketing efforts may be less intensive because agents are not guaranteed a commission, leading to less investment in promoting the property.
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3 |
Commission Guarantee
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The agent is assured a commission if the property sells during the listing period, which provides strong motivation.
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Only the agent who successfully sells the property receives a commission, which can result in less commitment on the part of individual agents.
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4 |
Seller-agent relationship
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A closer, more focused relationship develops between the seller and a single agent, often leading to better communication and a customized strategy.
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This relationship is more transactional, with the potential for communication issues and conflicting strategies among multiple agents.
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5 |
Property risks
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The property is marketed within the network of one agent or brokerage, which can limit exposure to that agent’s contacts and resources.
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The property benefits from being marketed by multiple agents, potentially increasing its exposure to a wider range of buyers. |
An exclusive listing in Ontario provides sellers with a dedicated real estate agent who is committed to effectively marketing their property. This arrangement ensures focused attention and strategic promotion, often leading to faster sales and better prices. The seller agrees to work with only one agent, thereby promoting a streamlined and cooperative process that benefits both parties through clear communication and mutual dedication.
For more info consult a leading realtor of Homes for sale in Brampton Ontario
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