An open listing lets owners sell their homes themselves as "For Sale by Owner" (FSBO) properties. It's a non-exclusive listing agreement, allowing an owner to execute open listings with more than one real estate broker. Then, the seller would pay only the real estate broker who brought the eventual homebuyer.
Learn more about open listings, the differences from regular listings, and the benefits of using one.
What Is an Open Listing in Real Estate?
Open listings are non-exclusive agreements that allow owners to sell their homes by themselves. They may list their home For Sale by Owner, or the owner may execute open listings with more than one real estate broker in order to find more potential buyers. In that case, after the home is sold, they then pay only the real estate broker who brought the home buyer.
How Open Listings Work
The biggest difference between an open listing and a listing that gives only one agent the right to market and sell a home is that an owner generally pays only a selling broker's commission in this situation. The owner is unrepresented. This is about one-half of the typical fees.
Owners don't pay a broker to represent themselves, but they do pay the broker who represents the buyer. And the owner won't owe a commission to anyone if the owner finds the buyer on their own.
Open Listings For Sale by Owner
Some sellers believe that they can advertise a home adequately and reach buyers through the internet, so they don't see any reason to hire an agent. They sometimes overlook the fact that agents bring a lot more to the table than simply an ability to find prospective buyers, such as their superior negotiating skills.
An experienced real estate agent can help a seller avoid common mistakes, such as selling their home for too little. According to a study by the National Association of Realtors (NAR), homes marketed with the assistance of a real estate agent sold for an average of $77,100 more than those listed FSBO. This goes to show the impact real estate agents can have on the process of selling a home.
What Are the Benefits of Open Listings?
Sellers might consider an open listing over an exclusive right-to-sell listing if there are a lot of buyers in the marketplace. An open listing can be negotiated separately with each real estate broker, and numerous brokers can bring buyers to the table.
An open listing might also seem attractive if the property has some problems and is difficult to sell. Having multiple agents working on potential deals and bringing interested buyers can increase the odds of a sale sooner rather than a long time later.
The commissions to various agents can all be different or identical. It depends on whatever can be negotiated.
Sellers aren't exposing themselves to a lot of risk by giving an open listing to several brokerages if there are more buyers in the marketplace than sellers with attractive listings. The main risk in this case might be a lack of deeply promoted exposure to real estate buyers in an individual broker's rolodex.
Why Do Agents Agree to Open Listings?
Agents who work with a lot of buyers might agree to accept the terms of an open listing if they want to guarantee that they'll get paid for bringing a buyer to the seller.
Agents generally don't advertise the property or spend money on promotion with an open listing unless they're fairly certain that the buyers who respond will contact only that agent.
The property might be unique or appeal to a large number of buyers. An agent might see an open listing as the only solution because the seller won't agree to an exclusive right-to-sell listing.
It's very uncommon to see open listings in the Multiple Listing Service (MLS), but this doesn't mean they're not a viable option in some cases.
Open listings may hold value for sellers in rural settings who don't want to commit to one single real estate brokerage. Rural listings tend to cover large areas, and word of mouth travels fast. Sellers in the country can list with every broker in the area if the brokers are willing, and then they pay only the broker who ultimately presents the winning offer.
The downside is that the seller typically has no agent to act as fiduciary or with negotiations, home inspections, or disclosures. There are no fancy photos, aerial tours, 3D enhancements, or professional marketing efforts unless the seller is able to handle these things personally. In fact, the seller is actually paying another agent to negotiate for the buyer.
At the time of this writing, Elizabeth Weintraub, CalBRE #00697006, was a Broker-Associate at Lyon Real Estate in Sacramento, California.
- Open listings are non-exclusive agreements that allow owners to sell their homes by themselves, or they can work with more than one real estate broker.
- Having multiple agents working on potential deals and bringing interested buyers can increase the odds of a sale sooner rather than later.
- After the home is sold, sellers then pay only the real estate broker who brought the home buyer.
- The seller won't owe a commission to anyone if they find the buyer on their own.