Readers have been asking us about this topic for a long time, so we’ve finally decided to address it in a Residence Riches edition of TheMoneyKings.com.

For your consideration: Save Money By Signing Short-Term Listing Agreements With A Broker.

First we’ll to explain the difference between a broker, Realtor and real estate agent (a.k.a., real estate salesperson), because a lot of people don’t understand this and the knowledge is essential if you’re thinking of selling a home:

Broker = a company that’s got its name on a sign that hires real estate agents OR an individual that has passed a state broker’s exam that works for a company that has its name on a sign that hires real estate agents. (Another way to look at this is to consider the company as a BROKERAGE and a person as either a Realtor, real estate agent/real estate salesperson or BROKER.

Clear as mud? Of course, that’s what the game of real estate is all about . . .

Next . . .

Realtor = a person that has either passed a state licensure exam to be a real estate salesperson or broker AND has also paid the National Association of Realtors to use their brand name of “REALTOR”.

Finally . . .

Real estate agent/real estate salesperson = either a broker or salesperson can be a real estate agent. The salesperson is the lowest level licensed individual that can work for a brokerage to earn commission off the sale of a house.

Now that we’re all sort of clear on this, let’s talk about the ONE big tip that will save you money when you go to list your house for sale with any of the aforementioned parties.

When you approach someone from a brokerage, more than likely, they’re going to get you to try to sign an exclusive right-to-sell listing.

BEWARE . . .

Signing this listing means that no matter what you do to drive the sale of your home on your own, the salesperson with who you’ve signed the exclusive right-to-sell listing will get commission from your sale.

The Money Kings don’t really think that you’ll be able to get a broker to agree to list your house under the other two types of listing agreements:

1. Open Listing
2. Exclusive Agency Listing

Feel free to research these on your own. The former basically gives the broker nothing for agreeing to take your listing, and the latter gives a little more. The “cash cow” for the broker, brokerage, real estate agents and real estate salespersons is in the exclusive right-to-sell listing. Bar none.

The only thing you can do to take advantage of the opportunities offered by listing with a brokerage (i.e., integrated marketing through the Multiple Listing Service) is:

NOT to sign any listing agreement longer than 90 days!

In fact, The Money Kings recommend 30-day listings with brokers, if you think you’ll be doing most of the marketing yourself.

YOU: “Wait???!!! MoneyKing, you mean that after I list my house with a broker, I still might have to call people or list my house on Craigslist.com just to get it moved??!!”

THE MONEYKINGS: That’s exactly what we’re saying, readers.

A real estate agent and his/her supporting broker will encourage you to sign the longest listing agreement possible. No one needs to sell your house more than YOU. By getting you to sign that long listing agreement, they’re betting your urgency to sell will cause you to actively pursue leads on your own. In the end, because of that listing agreement being in effect, THEY’LL GET PAID for your work if you are successful.

By signing long listing agreements (1 year or more) with say 20 clients, the brokerage and real estate agents can do a little work up front and then sit back as houses sit idle and the owners start to actively take charge of the situation. It’s great for them, bad for the sellers.

Remember that listing agreements can be RE-SIGNED with a broker at any time. And most brokers are so desperate for business that they’ll give you a 60-day listing, just to get your business in the hopes that they’ll get lucky. By signing the shorter agreement, if you realize that you’ve selected a lazy or ineffective agent, you can essentially fire them with the agreement terminates and sell your house FSBO . You’ll save a ton of more money this way!


Happy Selling.


The Money Kings

Keywords: home, sell, house, sales, agent, Realtor, listing, FSBO, brokerage, broker