Types of Commercial Listing Agreements
When a seller or a buyer enters into a commercial listing agreement or buyer agreement what does that mean and what does it really entail? This discussion is based around selling a property not leasing which we will address later in another post. Let’s discuss a commercial listing agreement first , there are 3 types of listing agreements:
- Non Exclusive or an open agreement
- Exclusive agency – Seller or another agent can sell the property
- Exclusive right to sell – meaning the owner can sell the property themselves
The first 2 of these require that the commercial real estate agent or broker become the procuring cause of the sale of the property for the seller and is in accordance with the terms of a signed commercial listing agreement. Think of procuring cause as defined as the event that produces the required result of the transaction in this discussion the offer, the contract and subsequent closing – or sale of a commercial property. There has to be some reasonable relationship where the commercial agent or broker provides the efforts necessary to put the transaction together for the seller and buyer.
Non Exclusive Listing Agreements
In a non exclusive listing agreement the seller may retain the services of more than one commercial real estate agent or broker where the seller is not required to pay a specific commercial real estate agent or broker on the agreement when the seller or another agent or broker is the procuring cause of the transaction as defined above.
The exclusive agency agreement requires the seller to pay the respective agent or broker they are working with unless the seller sells the property on their own. There are also listings called pocket listings.
Exclusive Right To Sell
Within the Exclusive Right to Sell commercial listing agreement, the listing commercial real estate agent or broker is entitled to a commission from the seller regardless of who is the procuring cause of the transaction. Most commercial MLS listings are of this type of agreement.