What’s an Exclusive Right to Sell Listing?

What To Watch Out For | Why Exclusive Right To Sell Is Popular | Exclusive Right To Sell vs. Exclusive Agency | How To Cancel | Other Types of Listing Agreements

Exclusive right to sell listing agreements give a single real estate agent the sole right to sell your home for a limited length of time, typically 3-6 months.

Once you’ve signed an exclusive right to sell agreement, your real estate agent will market your home to prospective buyers, and your agent will be paid commission (typically 3%) when your home sells regardless of who finds the buyer.

Home sellers can sign other types of listing agreements, but exclusive right to sell is the most common because it:

• Guarantees the agent will be compensated when the home sells
• Clearly defines the agent’s responsibilities to the client, and vice versa

Many agents and brokers only offer exclusive right to sell agreements because they’re less risky than other types of listings.

🏠 Ready to list your house? Our friends at Clever can connect you with great local agents who only charge 1% (or $3,000) in listing fees!

How To Read an Exclusive Right To Sell Agreement

Real estate agents usually use a listing agreement template provided by their brokerage or their state’s real estate commission.

Exclusive right to sell agreements don’t always say “Exclusive Right to Sell” at the top, but you’ll always be able to tell what it is by the language in the agreement, which will include something to this effect:

Important details to note in an exclusive right to sell agreement

The most important details in an exclusive right to sell agreement can usually be negotiated. Negotiable items include:

💰 Commission — The percentage or flat rate that will be paid to the agent when the home sells.

✔️ Permissions — The actions the seller allows the agent to take to market the property, which typically include things like placing a lockbox on the front door, standing a “for sale” sign on the property, taking pictures, and showing the home to potential buyers.

🕒 Extension period — The period of time after the agreement expires where the agent will still be paid commission if one of the buyers they found ends up purchasing the property.

⏰ Duration — The length of time  the agreement will be valid.

Exclusive right to sell agreements typically have a term of 3-6 months, but agents in a hot market might agree to a shorter term to earn your business.

Be wary of an agent who asks for an agreement that lasts more than 12 months — you don’t want to get locked in for a long time and remove the agent’s incentive to sell your house quickly.

» MORE: Realtor Fees — Your Questions, Answered

Why Are Exclusive Right To Sell Agreements so Common?

Exclusive right to sell agreements are common because they protect both the agent and the home seller.

An agent has to put time and effort into finding a buyer, and they often pay for marketing costs upfront, so guaranteed compensation is important.

For a home seller, an exclusive agreement with a clearly defined period of time serves as a deadline for the agent. The seller can be confident the agent has incentive to put in their best effort.

Exclusive Agency vs. Exclusive Right To Sell

Exclusive agency is another type of “exclusive” listing agreement, which often gets confused with exclusive right to sell.

Exclusive agency listing agreements only allow the agent to collect their commission if they find a buyer. If you — the home seller — find a buyer on your own, you don’t have to pay the agent a dime.

Obviously, exclusive agency agreements are risky for real estate agents. Agents might spend money marketing your home, and time searching for buyers, only to make no profit in the end.

As a result, some brokers won’t allow their agents to sign an exclusive agency agreement.

Cancellation of an Exclusive Right To Sell Agreement

An exclusive right to sell agreement is a legally binding contract, so technically it can’t be cancelled — the seller has to wait for it to expire, usually in 3-6 months.

However, real estate agents build their business by maintaining a good reputation, and keeping a client locked into an agreement they don’t want anymore can be bad for business.

If you want to cancel your listing agreement, ask your agent. You may also have to request to cancel in writing or complete a form provided by the agent’s brokerage.

Some brokerages charge a cancellation fee so they can recoup some of their upfront marketing costs if a client backs out of a listing agreement. If there is a cancellation fee, it will be noted in your original listing agreement.

Other Types of Listing Agreements

Besides exclusive right to sell and exclusive agency agreements, there are a couple less-common types of listing agreements:

Net listing

A net listing agreement allows a real estate agent to keep any extra money if the home sells for more than the listing price. For example, if the home is listed for $200,000 but sells for $225,000, the agent earns $25,000. Net listings are illegal in many states.

» READ: Why You Should Never Sign a Net Listing Agreement

Open listing

Open listing agreements allow multiple agents to represent the seller. But only the agent who finds a buyer gets commission when the home sells.

Open listing agreements can be risky for agents because their commission isn’t guaranteed, but it can give home sellers the opportunity for maximum exposure.

» READ: What Is An Open Listing? (And How Does It Work?)

Next Steps

No matter what type listing agreement you choose, make sure you understand its pros and cons. Next, look for an agent who meets your needs and understands your goals. 

Our friends at Clever can connect you with top agents across the U.S. who have experience with your specific type of sale. Clever sellers pay discounted listing fees of only 1% or $3,000! You’ll get the support you need from a full-service agent who meets your selling needs AND save thousands in commission. 

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Want to learn more about selling a house? Check out some of our other resources!

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What Companies Offer the Lowest Real Estate Commission Fees? Find out what companies you can turn to when you want a discount on real estate commission.

Selling a House After 1 Year or Less? You Need to Read This. If you’ve only owned your home for a short period of time, putting it up for sale comes with a whole different set of considerations. Find out everything that you need to know about selling a house after just one year!