An open listing agreement is a non-exclusive legal contract formed between the owner of a property and one (1) or more agents. Unlike other types of listings, the owner can sign the agreement with as many agents as they want. The seller can also attempt to sell the property on their own (and thus avoid having to pay a commission).
This type of “no holds barred” listing is commonly used by homeowners who 1) want to sell their property on their own (FSBO), 2) believe their home will sell relatively quickly, or 3) are looking to save money on the commission they would have to pay. While open listings may look desirable to sellers, they are the least preferable option for agents due to the uncertainty of receiving a commission.
Pros & Cons for Sellers
(PRO) – Can result in a faster-selling property if the market conditions are right.
(PRO) – Owner pays a reduced commission (or no commission if they sell on their own).
(PRO) – Not limited to working with only one (1) agent
(CON) – Owner will need to market the property themselves.
(CON) – Due to the lack of desirability for agents, they may not put in as much effort to market and sell the property.
OPEN LISTING AGREEMENT
This Open Listing Agreement (the “Agreement”) is made this [DATE] by and between [SELLER NAME] (the “Seller”) and [AGENT NAME] (the “Real Estate Agent”).
1. Property. The Seller hereby grants the Real Estate Agent the exclusive right to list and offer for sale the property located at [PROPERTY ADDRESS] (the “Property”).
2. Services. The Real Estate Agent agrees to use its best efforts to market and promote the sale of the Property through conventional means.
3. Compensation. The Seller agrees to pay the Real Estate Agent a commission of [#]% of the total sales price of the Property upon closing of the sale.
4. Duration. This Agreement shall remain in effect until the sale of the Property is completed or until terminated by either party upon written notice.
5. Miscellaneous. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors, and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth above.