While it is beneficial making a property well known via an open listing, there are just as significant advantages to listing it exclusively
An aspect of Philippines real estate not often discussed in various media is exclusive listings. Fundamentally, it is when a property is sold sans placement as an open listing in a Multiple Listings Service (MLS), an online real estate database, which allows members of the same real estate board to view it and contact the seller. Versions of the MLS here include the RPMLX, or the Philippine Multiple Listing Exchange, of the Philippine Association of Real Estate Boards (PAREB), and MLS.com.ph.
According to the latter, a benefit to open listings is being able to sell quickly, often done via various ways of broker cooperation. One is when different member brokers market the property in order to be the one to earn the sale and the commission. Another is the seller’s broker coming together with a broker representing a buyer, and working with their clients to agree on a deal, and sharing the commission in the process.
Why is it important to have exclusive real estate listings?
While somewhat limiting a property from being immediately exposed to the majority of the market, selling it exclusively can make sense for the selling broker, and the seller themselves.
What does it mean for brokers?
According to Investopedia, as well as many MLS sites, an exclusive listing is “a real estate sale transaction in which a specified real estate professional stands to gain a commission if a property sells within a specified time, no matter how a buyer is found. The purpose of an exclusive listing is to motivate the agent to sell the property quickly and at the highest price possible.”
It stands to reason than that brokers are poised to earn a little more with an exclusive listing, given that they successfully sell being that no other broker is involved. As an “exclusive right-to-sell”, it also means being compensated regardless, because as further defined by MLS.com.ph, it is “an exclusive contractual agreement or an Exclusive Right-to-Sell Agreement that exists between a listing broker and a seller wherein the listing broker acts as the agent or as the legally recognized non-agency representative of the seller(s). As such, the seller(s) agrees to pay a commission or fees to the listing broker regardless of whether the property is sold through the efforts of the listing broker, the seller(s), or anyone else.”
The way a broker is not guaranteed of compensation is if an “Exclusive Agency Listing” is what is agreed upon, where “the listing broker acts as the agent or as the legally recognized non-agency representative of the seller. However, the seller agrees to pay a commission to the listing broker if the property is sold through the efforts of any real estate broker. If the property is sold solely through the efforts of the seller, the seller is not obligated to pay a commission or fees to the listing broker.”
What does it mean for sellers?
For sellers, exclusive listings help ensure broker obligation, better coordination, and most importantly, price control. It prevents brokers from racing to sell, where, in an effort to ensure themselves the commission, the broker prioritizes being the first to find a buyer with little regard for selling at the price most beneficial to the seller.
According to Andrew Boo, Senior Divisions Director of Huttons Asia in Singapore, the exclusive right to sell gives a broker a “sense of security, where most would market the place for sale better and more aggressively, as they know their effort and capital will not go to waste.”
A greater deal of privacy is also said to be afforded to sellers, where an exclusive listing gives a semblance of control over who is made aware that the property is on the market. This is said to be important for high-profile sellers, such as major corporate executives moving to a new company and location, but have yet to announce their move, hence keeping the sale of their luxury home under wraps.
Sources: Investopedia, Forbes, Cooperator
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