BAYVIEW ESTATES REALTY

o       Open

-        Most common in commercial setting.

-        Usually an oral agreement.

-        Seller is not obligated to pay any broker, unless an acceptable buyer is produced. 

-     Owner doesn’t hire any particular broker.

o       Exclusive Agency 

-        Limited in time (ex. 6 months).

-        Agency agreement - One broker is hired to sell the property on terms satisfactory to the seller or on terms listed in the listing agreement.

-        During this time, the seller agrees not to list the property with any other broker. 

- Broker ends up with more of a proprietary interest than in an open.

·        BUT, the seller may sell on its own, without having to pay any commission.

      o       Exclusive Right to Sell

•       Identical to an exclusive agency, but the broker earns a commission even if the seller sells privately without the broker. 
•       Advantages: 
•   Broker will expend more time, energy, and money knowing that he/she stands to benefit from this exclusive relationship.  Brokers do not want to invest their time, money, and energy in a deal that they may not get anything from. 
•     Brokers will typically advertise and call upon other brokers to work with them based on a split of the commission. 
•     Gives broker a greater incentive to find a buyer. 
•     Most sellers like the idea of looking to only one broker, who is controlling the process.

     

      o   Flat Fee Multiple Listing

                -     Combination of the exclusive and open.

    -        The listing broker (seller’s broker) will earn a flat fee for listing the property on a MLS.

                -        Broker will put the property into a computerized service and solicit buyer brokers.

                -   The buyer's broker will earn whatever commission the seller has agreed to pay.

 

      o     Net listing Agreements

    -        Illegal in New York.

    -        A broker cannot negotiate an agreement with an owner where the owner says, “I want $400,000 and whatever

                     you get above that is yours.”   

    -        A broker cannot have an incentive to sell for a higher price on its own account.