What is an open list
An open list is a list of properties that uses multiple real estate agents to find potential buyers for a property. The agent who brings the winning buyer to the property receives the commission.
An open list can also designate an owner who sells his house or property independently, without paying a commission to a real estate agent.
BREAKDOWN Open list
A property that is sold via an open list may need to be sold quickly. The property may have been on the market for some time and has struggled to attract buyers. An open listing is commonly called a listing agreement with one or more real estate brokers on a non-exclusive basis. Agents involved in the sale of this property are all entitled to a commission if they ultimately appeal to the buyer.
Why open lists could be avoided by agents
Real estate agents may be reluctant to accept an open listing due to the seller’s lack of commitment to working with a single agent. The arrangement should benefit the seller by offering them versatility and more options for finding potential buyers. The seller will also likely pay only half the usual commission, which would go to the agent who brings the buyer in with a winning bid. Indeed, this agent generally only serves the buyer’s side. There is no sales agent because the seller is responsible for all the marketing of the property. The seller may believe that the property will be in such demand that it will be relatively easy to attract buyers who can respond to its price.
Real estate companies may have rules that govern whether or not their agents participate in open listing agreements. For example, some companies may not post open ads, but agents may be allowed to hire customers they already have as potential buyers. Real estate companies may be reluctant to work with open lists for fear that the seller will find their own buyers anyway and conclude an agreement without the participation of agents. It would make agents’ efforts a waste of time and money. The seller can try to bypass the agents and conclude an agreement directly with their customers which excludes them from the loop. The property may also be unattractive to buyers.
Agents’ limited potential to earn commission through open lists can cause agents to focus their energy on exclusive contracts.