What is an exclusive real estate sales contract
An exclusive real estate sales contract is a documented agreement between the seller and the realtor. Such a contract gives the agent the exclusive right to sell the property for a certain period of time. The contract spells out the obligations of both parties. In this article we will consider why to conclude an exclusive contract, what are its advantages for the seller and the realtor, whether it is worth signing and a number of other important nuances.
Why do I need an exclusive contract?
An exclusive contract with a realtor (agency) is signed with only one agent, which is why it is called such a contract. If the seller signed such a document with different realtors, there may be a conflict of interest.
An exclusive contract must necessarily specify the agent's commission, the terms and conditions of the sale, the specifics of advertising the object and other important points. Sellers may have a question - why do you need an exclusive contract? The answer is simple - in this case, the seller can be sure of the full commitment of the realtor and his high efficiency, which accelerates the sale of real estate, and at a favorable price.
Exclusive contract protects the interests of not only the seller, but also the realtor. The agent is sure that he will get his commission in any case, so he can work together with realtors from other real estate agencies, which increases the chances of finding a buyer faster. In this case, the seller can count not only on the organization of showings, but also on assistance in the pre-sale preparation of the apartment and verification of documents, creating an effective marketing strategy, advertising the object through all channels of the agency, the conclusion of the transaction with the support of a lawyer, etc.
What is the difference between an exclusive contract and an ordinary one?
Unlike an exclusive contract, an ordinary agency contract does not exclude the possibility of cooperation between the seller and other agencies or realtors. The usual contract fixes only the amount of the agent's commission.
If the seller enters into a regular contract with a realtor, he can find a buyer on his own without having to pay a commission to the agent. But in such a case, the intermediary cannot be expected to work at full capacity, as he will search for a buyer only through his own channels, so as not to disclose information about the object to other realtors and not to lose potential earnings.
What are the advantages of an exclusive contract for the seller and the realtor?
For those who have never sold an apartment or other real estate object under an exclusive contract, the pros and cons of this option of cooperation with a realtor may not be obvious. Although each party has its own benefits from entering into such a contract.
What advantages the seller gets from an exclusive contract:
effective advertising of the object - the realtor uses all possible marketing tools and advertising channels, adds the object to the agency's database, uses a system of partner sales, etc..;
determination of the optimal price - the agent analyzes the market, studies similar objects, examines the living space and determines the optimal cost of the apartment, which will be profitable for the seller and at the same time will interest the buyer;
limited period of realization - if in the case of an ordinary contract the agent can not always pay due attention to the seller's object, then at the conclusion of an exclusive contract he is interested to invest in the specified period and sell the apartment at a favorable price, as the size of the commission will depend on this price;
mutual benefit - when the owner of the apartment cooperates with several intermediaries at once, they compete with each other and often force the owner to reduce the cost for the sake of an interested buyer, while in the case of exclusive realtor defends the interests of the seller and will not unreasonably reduce the price;
safe transaction - realtors who cooperate with clients only under exclusive agreements, most often work in reputable agencies, which means that the company has its own lawyers to conclude safe and legal transactions;
availability of reports - the agent is obliged to provide the seller with reports on the work done, so that the owner can evaluate the success of the chosen strategy.
Working with one agency or realtor is also convenient for the seller, as he will not be constantly called by different agents, asking endless questions about the apartment, bargaining, negotiating about showings. With an exclusive contract, the owner can simply hand over the keys to the object to the realtor and quietly go about his business.
What advantages the realtor (agency) receives from the exclusive contract:
confidence in earnings - only one realtor has the seller's contacts and the address of the object, that is, you can not worry that the client will be "taken away" by another agent;
access to documents - the realtor knows that all the documents are prepared and the deal will not fail at the last moment because of the lack of any certificate;
cost recovery - the agent is sure that his efforts invested in the promotion of the object will pay off, and the commission will cover the cost of advertising, phone calls and other expenses;
convenient organization of work - when the realtor has no competitors for a particular object, he can clearly plan shows and do not worry that before viewing it will turn out that another agent has already sold the same property;
expansion of the client base - the work under an exclusive contract often ends with full satisfaction of the client's request, so the latter willingly shares the contacts of the realtor with his acquaintances, which is also beneficial for the agent;
development of professional qualities - exclusive cooperation with the seller implies the use of new methods of work, the search for non-standard solutions, the use of a professional approach, which allows the agent to develop as a real estate specialist and to form a positive personal brand.
Realtors are always interested in concluding an exclusive contract, as the seller of real estate passes to the status of a personal client, which expands the opportunities for work and successful sale of the object.
Can an exclusive contract be terminated?
There may be different reasons for terminating an exclusive contract. The seller may simply change his mind about selling his property because the real estate market prices have temporarily fallen and he wants to wait for better times. It may also happen that the owner is not satisfied with the work of the chosen agent.
Ukrainian law provides that both parties have the right to terminate the exclusive contract at any time. But it is important to understand that this may lead to certain consequences. Among them is the obligation of the seller of real estate to pay for the realtor's work, if this was stipulated in the contract, even if the apartment was not sold.
If the seller does decide to terminate the exclusive contract, he should:
Review the terms of the contract, particularly the termination provisions.
Send the realtor or agency a written notice of intent to terminate the contract. You should look in advance in the document to see how long the notice period is. The notice period can be different, for example 7 days, 30 days or even 3 months.
Pay a fee for termination of the agreement. Depending on the terms of the agreement, this commission may be 1-3%.
The seller may believe that he is not obliged to pay anything, because the object has not been sold. But at the same time, the realtor worked on the promotion of his real estate, incurred certain financial and time costs, so he can expect to be paid, including for the reason that it is stipulated in the contract, which was signed by both parties.
Should I sign an exclusive contract?
Sellers of real estate often doubt whether to conclude an exclusive contract with an agent, as they do not fully understand the advantages that such an agreement gives them. If the owner is ready to entrust the sale of his object to only one person, and he does not want to waste time and answer constant calls from dozens of realtors, an exclusive contract is quite suitable for him. If the owner is ready to take part of the work on himself, to be fully involved in the process of selling the apartment, then he can not be limited to work with only one agency. But it is important to realize that in such a case the seller risks reducing his profit.
Conclusion of an exclusive contract is not just a guarantee of payment of the realtor's commission. It is also the transfer of all responsibilities for the sale of the property. The agent takes over the entire process - from improving the appearance of the property to showing and checking the contract of sale of the apartment together with a lawyer. All the headache of selling the object goes to the realtor, while the owner saves time, nerves and strength.
If there is no desire to communicate with a bunch of intermediaries or there is a fear of falling into the hands of fraudsters, an exclusive contract with a reliable agency will also help. In the real estate agency "Mayak" work realtors who have extensive experience of cooperation with clients under an exclusive contract. In addition, the agency has its own lawyers and notary, which helps to protect the seller from various machinations on the part of the buyer.
Whether or not to conclude an exclusive contract for the sale of an apartment is up to the seller. But it is worth carefully considering all the pros and cons.
