Real Estate Glossary

What an exclusive right to sell means

An exclusive right to sell is a listing agreement between a property owner and a real estate agent or broker that grants the agent full authority to sell the property for a defined period of time. During this exclusive period, the owner cannot list the home with another agent or broker. The owner also cannot sell the property on their own without the agent’s approval.

This arrangement gives the agent complete control over marketing and selling the property while the agreement remains active.

How it differs from an open listing

An exclusive right to sell differs significantly from an open listing. With an open listing, the property owner may work with multiple agents at the same time and may also sell the property independently. In that case, only the agent who brings the buyer earns a commission, and if the owner finds the buyer, no commission is owed.

Under an exclusive right to sell agreement, the owner must pay the agreed commission when the property sells, no matter who finds the buyer. Even if the owner personally secures the buyer, the commission still applies.

Commission and contractual obligations

This type of agreement clearly defines how and when the agent or broker earns their commission. The commission becomes due once the property sells during the exclusive period, regardless of the source of the buyer. This structure removes uncertainty and ensures the agent receives compensation for their efforts.

The agreement also outlines other important terms, including the length of the listing period and any conditions that may apply if the contract is terminated early.

Services provided by the agent or broker

An exclusive right to sell agreement typically specifies the services the agent or broker will provide. These services often include pricing guidance, professional marketing, advertising, scheduling and conducting showings, handling inquiries, and negotiating offers. The agent also manages communication between buyers, sellers, and other parties involved in the transaction.

In return, the property owner agrees to cooperate fully by providing accurate property information and access for showings. This cooperation helps the agent market the property effectively.

Why this agreement is so common

This type of listing agreement is widely used in the real estate industry because it aligns incentives. Agents and brokers feel confident investing time and resources into marketing the property because they know they will earn a commission if the property sells during the listing period.

For property owners, the agreement offers peace of mind. It ensures the property receives consistent, professional marketing from a dedicated agent who has a clear financial incentive to achieve the best possible outcome.

What owners should consider before signing

Before signing an exclusive right to sell agreement, property owners should carefully review every term. Understanding the listing duration, commission structure, and obligations on both sides helps avoid misunderstandings later.

Taking the time to fully understand the agreement ensures you feel comfortable with your rights and responsibilities and allows you to move forward with confidence throughout the selling process.