What Is An Open Listing Contract?

February 17th, 2015
for Sale SignPosted by Kevin J Potter

The legal document which allows a licensed real estate broker the right to offer a property for sale is known as a listing contract. In the state of New Jersey, there are the three types of listing contracts: (1) exclusive rights to sell listing, (2) exclusive agency listing, and (3) open listing.

Listing Contracts

Each type of listing contract provides a different form of relationship between the agent (the real estate broker) and the principal (the seller).

  1. An exclusive rights to sell listing is the most common listing contract. As the name suggest, this listing allows one real estate broker to be the sole and exclusive agent for a seller and assures that the agent is compensated even if the homeowner sells the property himself.
  2. An exclusive agency listing also allows one real estate broker to be the sole and exclusive agent for a seller but allows the homeowner to sell the property himself without compensation to the owner.
  3. An open listing not only allows the homeowner to list the property with more than one broker but also allows the homeowner to sell the property himself.

listing Contract

Open Listing Contracts

Of the three listing contract available in New Jersey, an open listing is the most appeasing to a seller; however, the qualities that make it so beneficial are also what make it so detrimental to a seller.

The Potential Benefits

Open Listing HomeUnder an open listing contract, since any broker is allowed to sell the home, any broker is allowed to market the home. This results in multiple picket signs placed on the lawn and a heightened amount of advertisement and promotion – due to several brokers marketing the home rather than just one. Having six different real estate brokers market your house and only having to pay one (if any, since the homeowner can sell the house too) is of course the best way to sell a home. But what the expectations of an open listing is different from the reality of it.

The Realistic Consequences

An open listing is appeasing to a seller but not so much to a real estate broker. Brokers do not like “friendly” competition nor do they like the idea of not being paid for their efforts. Thus, little effort is given. After all, if you are not going to give a broker your full attention, why should they give you theirs? A brokers will rarely market a property under an open listing contract, unless they are certain they can prove a potential buyer was produced by them. So all that advertisement and promotion the homeowner thought they would get falls down to little to none.

Conclusion

The natural tendency of an open listing require the homeowner to do their own marketing. If the homeowner is inexperienced or unskilled, than the result could be the property being left on the market for much longer than expected. This is not to say that an open contract is completely useless. In some cases they can be more more beneficial than an exclusive agency listing or an exclusive rights to sell listing, but only to those who understand the real estate business and/or marketing. It is highly recommended for a homeowner to use a exclusive rights to sell listing or at least an exclusive agency listing. However, if you think you have the skill and time, then use an open listing. Just be sure you understand the challenge, and do not mistake it for free marketing.

Is A Real Estate Agent A Salesman?

January 26th, 2015

Posted by Kevin J Potter

It is quite easy to view a real estate agent as a salesman (or saleswoman). After all, the basic responsibility of a real estate agent, particularly as a seller’s agent, is to sell the home of a client to a ready, willing, and able buyer. Under these circumstances, a real estate agent would undoubtedly be considered a salesman by simple nature. However, the tactics of how an agent sells a home are distinctly different than how a salesman sells a product.

The Salesman
Imagine this scenario: You are enjoying aBob quiet sunday afternoon at your
home when suddenly there is a knock at your door. You answer it to find Bob. Bob is a salesman who has been going door-to-door in every neighborhood trying to sell his “one of a kind” product – a pen. Immediately he throws you his pitch; he tells you how great this pen is. The shaft has a beautiful design hand drawn by a professional artist in Italy. The weight is perfectly balanced. The outside structure is made of guano, a revolutionary material that provides more durability and prevents scratches. And he’s selling it for cheap! But in actuality the design was drawn by an art student at a local college who studied in Italy for a little while and is now mass produced by machinery at a warehouse. Describing the pen as “balanced” means relatively nothing. And the “revolutionary” material is not durable but cheap and low-quality, which is why the pen is being sold for such a cheap price.

The Agent
Now imagine this Scenario: You are enjoying a quiet sunday afternoon at your home when suddenly there is a knock at your door. You answer it to My Boy Leofind Kevin (sounds like a nice guy). Kevin is a local real estate agent. He has conducted proper research
and determined that people in your particular neighborhood may be more willing than most to buy a new home. Immediately he ask you if are you interested in buying a home. If you say no, Kevin simply thanks you for your time and walks away. He understands that purchasing a home is a large investment and not everyone is ready, willing, and/or able to invest. To continue otherwise would be a waste of both his and your time. If you say yes, Kevin will thank you and show you several homes he has listed. He will give you details about each home including their structure, their neighborhood, what each room can be used for, and he will also tell you their faults – such as damages and leaks.

The Difference
The key difference between the tactic of an agent and the tactic of a salesman is that the agent views you as a client while the salesman views you as a customer. The salesmen (according to the example) is selling you a cheap and low-quality product. You will not buy it if you knew the flawed details. The salesman knows this but he also knows that he will never see you again. So he persuades you to purchase this less-than-perfect pen with little consequence to his action. The agent’s perspective is quite different.

As many can agree, searching for the proper home takes time. During that time, the agent is constantly by your side, providing input and taking in your comments and concerns. There is constant communication between the two of you and a trust is built. Furthermore, the agent relies on you to refer him to other homebuyers (for the market for homebuyer is very small compared pen-buyers). In order to gain a referral, he must provide you with the best experience capable. Communication, trust, and genuine concern are the elements that differentiate you as a client rather than a customer.

So if you ever think an agent is just trying to sell you something, don’t! An agent is their to guide you in your investment of a home, and will not deceit you – at least that’s how the good agents work. And that’s always how the agents at Group 2020 work.

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The Most Expensive House (for Sale) In New Jersey

December 31st, 2014

Posted by Kevin J Potter

We all have dreams about becoming a multi-millionaire and living in a huge mansion – one with a high ceiling, a big pool, a home theatre, and an entire room filled with first edition books . . . maybe you even have Michael Caine as your butler. If you do fulfill your dream and are searching for that huge mansion, you should consider this place. The most expensive house for sale in New Jersey – literally!

Gloria Crest - OverviewThe house, known as “Gloria Crest”,  is situated in Englewood, NJ and cost only $25 million. It was built by European royalty and is evident by its beautiful structure. The last alleged owner of the home was Gloria Swanson, given to her by Joseph P. Kennedy sometime in the early 1900’s. In 1978, Gloria Crest was featured on “Lifestyles of the Rich and Famous.

The house is 12,842 sq.ft. and includes 8 bedrooms, 9 full bathrooms, 5 half bathrooms, 6 fireplaces, 4 kitchens, 2 staff apartments an 8-car garage.

The lot is 5 acres and is protected by a 10ft. high gate that secludes the home. When driving from the gate to the house, you pass by a reflecting pool, fountain, apple orchard and several gardens.

Gloria Crest - Living Room Gloria Crest - PoolGloria Crest - EntranceGloria Crest - Dinning RoomGloria Crest - Kitchen

Can you see yourself living in luxary at Gloria Crest?

Links:
Previews Inside Out – Home is Where the Heart is
Wikipedia – Gloria Swanson
Zillow – 83 North Willow Street