A listing agreement is a contract between a seller/property owner and a real estate agent. It allows the agent permission to sell property on behalf of a seller on agreed terms and commission.
The Types of Listing Real Estate Agency Agreements
- Exclusive Listing Agreements; and
- Non-exclusive Listing Agreements.
1. Exclusive Listing Real Estate Agency Agreements
This is a listing agreement where a seller procures the services of a sole real estate agent to advertise and sell his/her property for a specific period of time. Regardless of who finds the buyer, the listing agent will earn a sales commission.
Pros
a) The agent works exclusively for the seller. The seller holds the agent accountable if they don’t deliver or breach their obligations under the contract
b) There is greater loyalty and commitment by both parties
c) The agent fully invests their time and resources in marketing the seller’s property on different social media platforms
d) Retaining the property’s exclusive appeal demonstrates its intrinsic worth
e) The property acquires more exposure and showings
f) There are higher chances of the seller’s property having more offers since the agent controls the quality of the property from how it is advertised, presented and sold to the market
Cons
a) The agent gets paid their commission regardless of who sells the property.
b) Engaging the services of an unregistered, unprofessional and inexperienced agent will result in poor performance of their obligations under the agreement and losses to the seller.
2. Non-exclusive Listing Agreements
This type of listing agreement allows the seller to list his/her property with numerous agents, however, the sales commission is received by the agent who sells the property.
Pros
a) The seller is obliged to pay a commission to the agent that has closed a sale;
b) The property acquires more exposure and showings on different platforms;
Cons
a) Since the procured agents are not guaranteed a commission, they may not aggressively sell the property as they would if they had an exclusive listing;
b) There is a risk of trivializing the property because of the numerous listings;
c) The hassle of the seller being sought over by different real estate agencies and buyers who may have seen the property advertised on the same real estate platforms; and
d) The seller is ultimately responsible for the sales and advertising of his/her property.
How can we help?
Are you a seller in search of potential buyers for your property? Or are you a buyer looking for the property of your dreams? At Property Boutique, we have a team of qualified professionals with vast experience in real estate agencies and knowledge of the real estate market and existing trends. We will endeavor to eliminate for you the daunting task of trying to find potential buyers and dealing with numerous real estate agents, provide the best sales and marketing strategy for your property and oversee the sale process while ensuring you secure the best possible price for your property.
Written by Cynthia Kitolo
Legal Officer & Advocate of the High Court of Kenya
