Most Listing Agreements Include a Provision Stating That: Understanding Your Real Estate Contract

When you`re selling a property, one of the first things you`ll do is sign a listing agreement. This contract outlines the terms and conditions between you and your real estate agent, including how the property will be marketed, the agent`s commission, and the length of the agreement. However, there`s one provision that`s often included in listing agreements that`s worth understanding: the “exclusive right to sell” clause.

What is an exclusive right to sell clause?

An exclusive right to sell (ERTS) clause is a provision in a listing agreement that grants the real estate agent exclusive rights to sell the property for a specified period of time. This means that only the agent who listed the property has the right to earn a commission from the sale. If another agent or buyer finds a buyer for the property, the original agent is still entitled to receive the commission.

Why is an ERTS clause important?

An ERTS clause is important because it protects the agent`s investment in marketing your property. The agent will spend time and money advertising your property, and if another agent or buyer finds a buyer for the property, it`s only fair that the original agent is compensated for their efforts. Additionally, an ERTS clause ensures that the agent will work diligently to find a buyer for your property. If the agent knows that they`re the only one who can earn a commission from the sale, it`s in their best interest to market the property effectively and find a buyer as quickly as possible.

What are the limitations of an ERTS clause?

While an ERTS clause is a common provision in listing agreements, it`s important to understand its limitations. First, the clause typically includes a specific time frame during which the agent has exclusive rights to sell the property. If the property doesn`t sell within that time frame, the agreement may expire, and the seller can choose to list the property with another agent or sell it on their own. Additionally, the seller may be required to pay certain fees if they terminate the agreement early or violate other terms of the contract.

In conclusion, most listing agreements include a provision stating that the agent has an exclusive right to sell the property for a specified period of time. This provision protects the agent`s investment in marketing the property and ensures that they`ll work diligently to find a buyer. However, it`s important to understand the limitations of the provision and the potential consequences of violating the terms of the agreement. As always, it`s important to review the contract carefully and consult with a real estate attorney if you have any questions or concerns.