Mariana Wagner

The Difference Between Exclusive Right to Sell and Exclusive Agency [Colorado]

The biggest confusion that I see, as a Colorado Springs real estate agent, is understanding the difference between an Exclusive Right to Sell and Exclusive Agency, both by home sellers AND other agents.

There are 4 ways that a home seller in Colorado could choose to sell their home:

1. Exclusive Right to Sell with an agent
2. Exclusive Agency with an agent
3. Open Listing with multiple agents/offices
4. For Sale By Owner with NO agent

An open listing is basically an agreement between the home seller and multiple agents to get their home sold. Whoever sells it first, gets the commission. The major issue with this is that a property can only be active in the MLS with one agent at a time, so there is no incentive for the 2nd or 3rd agent to even enter into such agreement.

If you decide to sell For Sale By Owner you are opting to sell your home without the assistance of an agent. (Hint: most home buyers DO work with agents, so co-op’ing something to a Buyer Agent would definitely get you more buyer traffic, and a better chance at selling.)

Now, the first two listing agreements are the most common and also the most misunderstood:

Exclusive Right to Sell

An Exclusive Right to Sell agreement is when a home seller signs an “exclusive” agreement with an agent. The agent represents the interests of the home seller and gets paid the agreed upon commission at time of successful close, regardless of the source of the Buyer.

In most cases, the home seller agrees to pay the listing agent X% commission*. If the Buyer is represented by another agent, then that X% commission is split between the listing agent and the Buyer Agent.

*Note: Commissions are always negotiable and are decided between the agent and client at time of signed listing agreement.

This is the most common form of listing agreement in Colorado, as it takes most of the marketing, negotiating, selling and closing responsibility OFF the homeowner.

Read More: Colorado State Exclusive Right to Sell Contract

Exclusive Agency

An Exclusive Agency Listing Addendum is used when the listing agent agrees to EXCLUDE the home seller from the “source” of the Buyer. Basically, if the home seller is the one who finds and secures the home buyer, the listing agent will not get paid.

Per the Exclusive Brokerage Listing Addendum:

“This Seller Listing Contract does not apply to a Sale of the Property to a buyer procured solely by Seller without the assistance of Broker or any other person (Seller Sale).”

This addendum is usually used with former FSBO home sellers who may already have a few potential home buyers interested in the home before they listed with an agent. Or, when a home seller has the potential to sell it to a friend or family member, but lists with an agent “just in case” that buyer doesn’t work out.

Hopefully these explanations will clear things up next time YOU enter into a listing agreement.

For more information on listing your Colorado Springs home with a Realtor®, contact us today: 719.434.7525

July 10th, 2009 by Mariana Wagner | 2 Comments »

This entry was posted on Friday, July 10th, 2009 at 9:51 am and is filed under Colorado Springs Homes, Colorado Springs Real Estate, Real Estate FAQ's, Real Estate Glossary, SELLERS. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Thesa Chambers said at July 10th, 2009 at 10:07 am

   What great information – I have had to explain this several times – your explanation is so clear and easily understood. When my sister is ready to sell in CO Springs – you will be given that referral.

2. Mariana Wagner said at July 10th, 2009 at 10:31 am

   Thesa – Thank you for your comment, and thank you for entrusting the (opportunity) sale of your sister’s house to us – when that time comes. We we take excellent care of her!

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