Thinking of buying or selling your home? It is an especially competitive time to jump into the market, particularly for Vancouver and Toronto real estate
. That’s great news for sellers, who can often pick and choose from multiple offers – but not so much for buyers, who are finding they’re steeped in bidding wars every step of their home purchase.
It’s important to understand the various marketing methods used to position homes for sale – including the concept of an exclusive listing. Here’s what both buyers and sellers should know about this tactic, and how it can benefit – or be a detriment – to them.
What is an Exclusive Listing?
A home for sale that is not marketed on the Multiple Listing System on Realtor.ca is considered to be exclusive. It means that instead of being seen by potentially thousands of agents and their clients, it is made available to just a handful of pre-selected buyers, who are also represented by the seller’s listing agent and brokerage. An exclusive listing is sometimes used for a limited time before opening the home up to the full market later, and a real estate agent will often position it as a tactic that “creates buzz”.
Exclusive listings are most often used to keep a home’s sale private, as there’s no open house or sign on the front lawn – popular with celebrities and other very high-earning individuals. They’re also used when a home is anticipated to be very hard to sell, or will only appeal to a very specific buyer.
What Sellers Should Know
While an exclusive listing may sound like a way to make your home seem more prestigious, the reality is most sellers aren’t rock stars, and would benefit from as many eyeballs on their listing as possible. Selling your home during an exclusive listing period can drastically cut down on the competition to buy it, which could translate to lower offers – and that’s not doing a seller any favours, especially in the hot Toronto real estate
So if exclusive listings generally aren’t a good idea for sellers, why would your agent suggest one? Here’s where things can get duplicitous; because the agent represents both the seller and potential buyers, they’ll be earning commission on both ends of the transaction. In an fully-marketed home sale, the buyer and seller agent split commissions 50-50.
It’s important as a seller to understand fully why an exclusive listing may or may not be a good fit when marketing their home: chances are, they’re better off joining the MLS-marketed masses.
What Buyers Should Know
On the flip side, exclusive listings can seem a great opportunity to buyers: being confined to a set pool of other buyers can help control the competition, and give you a better shot at winning that home. So how can buyers get into these elusive groups?
Brokerages and agents will often only tap their own clientele to view an exclusive listing, meaning you’ll need to be under contract for an agent’s services to be considered – and agents may use the promise of exclusive opportunities to sign on the dotted line.
Work With a Pro You Can Trust
Whether you’re a buyer or a seller, it’s important to work with a real estate professional you trust. Know your options before committing to your agent, and be sure to ask lots of questions during the marketing process for your home sale – transparency is key to coming out a winner in Canadian real estate.
Penelope Graham is a managing editor at Zoocasa, a real estate brokerage based in Toronto.
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