There are different types of listing contracts available. In Florida, the most common listing contract is an exclusive right of sale. The exclusive right of sale gives brokers the best chance for a return on expenses incurred trying to sell a home. Also available, but less popular are an exclusive agency listing or an open listing.
An exclusive right of sale listing entitles the broker to compensation if the property is sold through the efforts of any party including the owner. First Florida Realty & Auction Co. v. Peacock, 703 So. 2d 1199 (Fla. 1st DCA 1997). Any sale during the term of the listing will cause the owner to be liable to the listing broker for a full commission. Community Cablecasting Corp. v. Daniels & Associates, Inc., 215 So. 2d 17 (Fla. 1st DCA 1968). The owner cannot sell the property without paying a commission, unless an exception is noted in the contract. If a cooperating broker assists the listing broker in securing a buyer, the owner pays the listing broker the stated commission and the listing broker pays the cooperating broker.
Unlike the exclusive right of sale listing, in an exclusive agency listing the owner may sell the property and avoid paying the broker’s commission. An exclusive agency listing entitles the broker to compensation if the property is sold through the efforts of any other party except for the owner. If an owner sells the home, the broker will have spent time and money in finding a seller with no commission to reward their work. The exclusive agency listing benefits the broker because no other broker will be able to list the property during the listing term.
The least beneficial listing contract for a broker is an open listing. An open listing provides a broker with the right to compensation only if that broker is successful in finding a purchaser. An open listing is a unilateral contract that becomes a bilateral contract when the broker finds a ready, willing, and able buyer. An open listing benefits a broker when the home matches the criteria for a broker’s client.
If you are about to enter into a real estate brokerage agreement or are involved in a commission dispute call one of our South Florida real estate attorneys today at (954) 779-7009.