Business Lessons

Title: Exclusive RE Listing Agreement

The Salesman who asks an Owner of real estate for an exclusive listing usually originally honestly intends and promises to give major and continuing effort towards selling or leasing the Owner’s property in exchange for getting the Exclusive listing.

1. Granting an “Exclusive Real Estate Listing Agreement” means that:

1.1 The Salesman holding the Exclusive is the ONLY ONE who will likely try really hard to sell the Owner’s product

because he will get a full commission; and

the other Real Estate agents know they will generally have to split commissions with the Salesman holding the Exclusive.

And if the other salesmen in the market can “steer” their client to a competitive property where they won’t have to split omissions …

they will almost always do so.

So very often the MERE EXISTENCE of the Exclusive Listing
DRIVES OTHER SALESMEN AWAY from the Owner’s property.

This makes the Owner practically Totally Dependent upon that Salesman …

and on him ALONE, to sell it.

2. Often the Owner deceives himself into believing that the Salesman holding the Exclusive will continue to expend continuing heavy effort to selling Owner’s property;

2.1 Now it is a Fundamental Truth that all Living Things believe:

You may rely upon me
to do what is best for me.

SO THE PROBLEM IS that since the Salesman will sell anybody’s property to anyone … (its his job!)

he will do so
even if the property being sold
is a competitive property

and even if selling the other property
deprives the Owner who trusted him enough to give him
the Exclusive, of the sale the Exclusive holding
Salesman COULD HAVE BROUGHT HIM.

RESULT

The Salesman’s desire to do what is Best for Himself works against the Owner’s Best Interest:

3.1 It invites his attention to making deals and selling properties that might “get away and be sold by others; that is, it takes his attention awayfrom the Owner’s property and towards the other people’s products

not the property of the Owner who granted the Exclusive;

3.2 and if marketing problems arise in selling the Owner’s property

perhaps because Owner’s property doesn’t sell as fast as the Salesman thinks it ought to … and the Salesman gets discouraged

the Salesman rationalizes that he has the Owner’s Listing “in his pocket” and

this induces the Salesman to abandon the major and continuing effort, the Owner was promised when he asked for the Exclusive, and go sell something else!

GENERAL RULE

Absent some unique Building or especially unusual or difficult market condition,

THE EXCLUSIVE REAL ESTATE LISTING AGREEMENT
ALWAYS WORKS AGAINST THE OWNER’S BEST INTEREST.