What is Exclusive Right to Sell?
The Short Answer
Exclusive Right to Sell explained simply
An Exclusive Right to Sell agreement is a contract that gives a real estate broker the sole right to sell a property. This means that for a set period, only that broker can market and sell the property. The key part is that the broker gets paid their commission no matter who finds the buyer—even if the seller finds a buyer on their own. This type of agreement is the most common in real estate because it gives the broker the most incentive to invest time and money in marketing the property.
Real-World Example
Selling Your Business with an Exclusive Right to Sell Agreement
Imagine you own a small coffee shop and decide to sell it. You sign an Exclusive Right to Sell agreement with a business broker for six months. During this time, the broker actively markets your coffee shop, lists it online, and brings potential buyers.
Three months in, your cousin, who heard you were selling, decides they want to buy the coffee shop directly from you. Even though your cousin was not brought by the broker, the broker is still entitled to their commission because of the Exclusive Right to Sell agreement. This protects the broker's efforts and ensures they are compensated for their work in making the sale happen.
Why this matters
This agreement is important because it motivates the broker to put in their best effort. They know they will get paid for their work, which encourages them to spend money on marketing and dedicate time to finding the right buyer. For sellers, it means a dedicated professional is working to get their business sold.
Always read the fine print of an Exclusive Right to Sell agreement. Understand the commission structure, the length of the agreement, and any clauses about what happens if you find a buyer yourself. It’s a big commitment.
Always read the fine print of an Exclusive Right to Sell agreement. Understand the commission structure, the length of the agreement, and any clauses about what happens if you find a buyer yourself. It’s a big commitment.
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