Open Listing Agreement
What is an open listing agreement?
An open listing agreement is a non-exclusive listing contract entered into by a real estate broker and a seller. In this listing agreement, the seller can engage as many brokers as they wish and agrees that if a broker is the direct cause of the sale, the broker will receive a commission. However, if the seller sells the property themselves without any assistance from a broker, no broker commission is due under an open listing agreement.
How is an open listing different than other types of listing agreements?
In an open listing agreement, the seller of the house has the right to sell the property themselves without any assistance from the broker and NOT pay the broker a commission. This situation contrasts with an exclusive right to sell listing agreement, where if the seller sells the home themselves without any assistance from the broker, they still have to pay a commission.
What is the maximum number of brokers a seller can hire under an open listing agreement?
There is no limit; they can hire as many as they want in an open listing agreement.
An open listing agreement is what type of contract?
It is express since it is in writing. It is also unilateral, as only one party to the contract makes an enforceable promise. The seller promises to pay the broker a commission if they find a buyer. You can think of a lost dog poster as an open listing agreement. The reward offered on the missing dog poster is the commission. If someone sees the missing dog sign and finds the lost dog, the owner is bound to pay the reward. However, the person who views the poster is not bound to find the dog.
Is there a time limit in the contract?
Yes, all listing agreements will have a period during which they are in effect. Commonly, this period is 120-180 days.
Who determines the commission to be paid in an open listing agreement?
The listing agreement will state the exact commission to be paid if a sale occurs. The commission amount is determined by negotiation between the seller and the broker.
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