There are a few different types of listing contracts, although only one is used commonly in Hawaii real estate. When we meet to go over the listing I’ll explain carefully why the Exclusive Right to Sell is the best thing for you.
This type of listing is not used in Hawaii, at least not that I have ever seen. In an open listing anyone can sell your home and get paid a commission, and nobody has the right to market the house more than anybody else. This gives Realtors very little incentive, because unless they have their own buyer, they are unlikely to earn any commission from the sale. In an open listing, Realtor A could spend thousands of dollars marketing your house, but if the buyer who ends up buying it is working with buyer’s Realtor B, then Realtor A receives nothing.
So in reality what ends up happening is nobody is going to spend any money or time selling your house unless they already have a buyer for it.
You can give a Realtor the right to earn a commission for one buyer, one time. This is seller’s suicide. Why would a Realtor spend any money or time selling your home if you only give them one shot? It just doesn’t make any sense.
Once in a while there will be a “FSBO” For sale by owner that allows a Realtor to bring a buyer and earn a commission. The commission is only guaranteed for that buyer and that Realtor, and prevents the buyer from coming back later without the Realtor. This is totally lame and nobody is going to sell your home this way.
Exclusive Agency Listings
In an Exclusive Agency Listing, one Realtor has the right to market and sell your home if they find their own buyer. It means that if a buyer comes without a Realtor they can earn a commission, but if a buyer is working with Realtor B, then Realtor B cannot earn anything. So guess what? Do you think Realtor B is going to bring you buyers? Nope. They are going to take their buyers to listings that will pay them.
The only way your house will sell in an Exclusive Agency Listing is if your agent finds the buyer on his own, which is not very common. It means only one Realtor is working to sell your home, and all the others don’t want anything to do with it.
Exclusive Right to Sell
This is the most common type of listing, which means that one Realtor, me, gets to market your property, and no matter where the buyer comes from, I get paid and so does any other Realtor who brings a buyer. This gives me the maximum incentive to sell your Hawaii home. I will spend thousands of dollars marketing and many hours working to sell your home, because I will earn money if it sells. I will work with other real estate agents because they can get paid too, and I will tell everyone I can about your house.
The smartest thing to do is to use an Exclusive Right to Sell so that everyone has the most incentive to sell your home.