Broker Contract?
A friend who is about to list a very high-end townhouse for sale (5M+) asked me some questions this morning and I was unable to give her good answers. Perhaps some of you can… What specifically should be required of a broker who is given an exclusive listing? For instance, stating that the broker will…
A friend who is about to list a very high-end townhouse for sale (5M+) asked me some questions this morning and I was unable to give her good answers. Perhaps some of you can…
What specifically should be required of a broker who is given an exclusive listing? For instance, stating that the broker will do “advertising” for the listing seems way too vague. On a multi-million dollar townhome, where should the broker be expected to advertise today (both print and online)? Are there any media outlets in Europe that are considered essential to attract foreign buyers? How much advertising is considered appropriate?
What about mailings? To whom and how big of a mailing list?
Commission. What percentage is customary on an exclusive listing for a townhouse?
What length of time?
Anything I haven’t thought of? Many thanks…
Unless you will be doing all the marketing & advertising plus all open houses and showings yourself you need a listing agent (that’s what an exclusive means.) The job of that person is to market your property to all other brokers (who will market to their customers)and directly to the public.
The commission (traditionally 6%) is than split between the listing agent and the buyers agents (with each firm receiving 3%). An open listing means the 6% commission would go to whoever brings the buyer. However there is no contract, the owner is not obliged to give the broker anything in this case.
Open listings work with Rentals, because the tenant not the landlord pays the fee.
People who can afford a $5MM Townhouse are generally very busy (making the money) and work with a Broker.
When selecting an exclusive agent your friend should do the following:
1) Get recommendations 2) Interview a least three brokers who have sold Townhouses in your area 2) Call their clients to determine their level of satisfaction (references)
What to expect from an exclusive agent?
1) At least Professional Photography, professional floorplan
2) Marketing Campaign to market property to brokers
a. Broker Open house
b. E-mail Blasts to broker community
3) Marketing Campaign to general public
nytimnes.com
streeteasy.com, etc
3) No matter how great the property is marketed it means nothing if it’s not PRICED RIGHT.
Hope this helps and good luck to you and your friend.
Unless you will be doing all the marketing & advertising plus all open houses and showings yourself you need a listing agent (that’s what an exclusive means.) The job of that person is to market your property to all other brokers (who will market to their customers)and directly to the public.
The commission (traditionally 6%) is than split between the listing agent and the buyers agents (with each firm receiving 3%). An open listing means the 6% commission would go to whoever brings the buyer. However there is no contract, the owner is not obliged to give the broker anything in this case.
Open listings work with Rentals, because the tenant not the landlord pays the fee.
People who can afford a $5MM Townhouse are generally very busy (making the money) and work with a Broker.
When selecting an exclusive agent your friend should do the following:
1) Get recommendations 2) Interview a least three brokers who have sold Townhouses in your area 2) Call their clients to determine their level of satisfaction (references)
What to expect from an exclusive agent?
1) At least Professional Photography, professional floorplan
2) Marketing Campaign to market property to brokers
a. Broker Open house
b. E-mail Blasts to broker community
3) Marketing Campaign to general public
nytimnes.com
streeteasy.com, etc
3) No matter how great the property is marketed it means nothing if it’s not PRICED RIGHT.
Hope this helps and good luck to you and your friend.
For a house at that price you can probably do a co-exclusive,there are advantages and disadvantages to both.
6% is customary.
Your friend may want to have the advertising layed out in the contract.
An open listing to reach the largest pool of buyers my Arse. Maybe for a 200k Co-op, not for a 5 million+ house. Most buyers in that price point will be working with a broker. I assume that your friend wants to sell his/her home, not have a walking house tour every sunday.
Deal with a firm that handles higher end luxury properties. I wouldn’t give an exclusive to a small broker on a property of this type.
Brown Harris Stevens
Corcoran
Elliman
Halstead
Stribling
Theses are the brokers they should be working to name a few. All have extensive online presence.
My question is why exclusive listing? One would think you want an open listing so you are reaching the largest pool of buyers.
If the customary commission is 6% then I think an exclusive listing should be be half – 3%. And that’s an obscene amount relative to the work involved. Getting too specific about where to advertise & how many people to mail to doesn’t seem necessary. That’s what the broker is supposed to know how to do. It’s a very small market for $5 million properties, and 150k is plenty of incentive for them to find one willing and able buyer.
3 months is a reasonable length of time. Can always renew or take it to another broker after that.
Definitely tell your friend to add specifics to the contract. Just write it in and have both your friend and the broker initial the written notes. Even when it’s not a high-end $5 million property brokers these days should be providing a professional photographer and floorplan for the online listing; the listing should be on the company website and the New York Times.