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When selling a property and working with real estate professionals, you have two options for a traditional listing agreement: open or exclusive. What’s the difference between open vs. exclusive real Estate listings in Costa Rica?
Open listing: the seller is allowed to use more than one broker or agent. Only the broker who successfully finds a ready, willing and able buyer is entitled to a commission from the seller. If the seller finds a buyer on their own without the aid of any of the brokers, no compensation is payable to any brokers.
Exclusive listing: In an exclusive listing, one broker is specifically recognized as the seller’s approved representative. This implies that while the agreement is in effect, only one broker has the authority to promote, advertise, and display the property for sale. Regardless of who sells the property, the agent is frequently entitled to a fee of roughly 50%.
So which is better for you?
To assist you in selling your home, below are the benefits and drawbacks of open vs. exclusive real estate listings in Costa Rica:
Open Listing Pros
A pro of working with an open real estate listing broker is that it allows more prospective buyers to see your property as you are not “tied down” to one real estate company and are at the mercy of their management and timelines. Multiple agents could increase the chances of selling your property to real estate investors quickly, especially if it turns into a competition to sell your property first to earn that commission they are all after. Additionally, an open listing may save money over an exclusive listing over because you are not forced to pay a commission to a real estate agent unless this agent sells it. You could even end up being your own broker and selling the property yourself if you can find your own buyer to save on commission fees.
Open Listing Cons
The potential cons to an open listing depend on who you work with. For example, suppose you don’t choose the right agency(s). In that case, you may end up with unqualified buyers (lookie-loos) who are just curious about your property and are not interested in buying it. This can get frustrating and become a potential energy drainer. Sometimes buyers may see that you’ve listed on multiple agencies and think: “They might be having a hard time selling this home,” and try to get themselves into a better deal. Lastly, because the brokers are competing with one another to find a buyer rather than the greatest price, you might not get offers in the price range you hoped for.
Exclusive Listing Pros
The pros of an exclusive real estate agent listing heavily rely on who is your real estate broker. An exclusive agent will hopefully spend more time and effort marketing your home because there is a guaranteed chance of receiving a commission. In theory, because you are working exclusively with only the broker, they should help screen potential buyers so that you only show your property to qualified individuals. If written into your contract, you could receive help getting your house ready for sale. This could include suggestions for temporary furnishings and help to redecorate.
Exclusive Listing Cons
There can be a lot of cons to an exclusive real estate agent listing. For example, selling your property with only one agent may take longer because you have a smaller pool of potential buyers. It can be more expensive because your contract with the agency is legally binding. You will have to wait until the existing agreement expires or pay a penalty to dissolve the arrangement if you decide you want to switch agents for any reason. You must establish and maintain a good rapport with your agent as you will need to establish frequent communication. Your agent should inform you about who has been seeing your home and whether any offers have been made.
Which kind of real estate agent will you choose?
Your decision on whether to list your property with an open or exclusive agent may be influenced by the status of the market at the time, the kind of property you are selling and where it is located, the target price, and the accepted methods in your community.
So which type of listing agreement is right for you, the property owner? It may depend on your current situation. If you are interested in selling your property quickly, then open listings may be the best option for you. However, if you are willing to wait longer to sell, then an exclusive listing may be your choice.
Gap Real Estate uses an open buyer agency agreement meaning you can use as many agencies as you choose to sell your home. Once your property is sold commissions are only paid to Gap as the result of one of their agents finding you a buyer and closing the deal.
-Written by Lawsen Parker of Gap Real Estate.