What is Exclusive Right to Sell?

Dated: April 10 2023

Views: 161


The Colorado Association of REALTORSⓇ (CAR) is currently awaiting Governor Jared Polis’ signature on Senate Bill 077, also known as the Restrictions on Broker Engagement Contracts. The bill is designed to protect brokers and homeowners from companies using unfair tactics to secure an exclusive right to sell a home. But what is “exclusive right to sell”? And how are certain companies using it against homeowners and Realtors?

Understanding Exclusive Right to Sell

Having an exclusive right to sell a home is not, in itself, a bad thing. Nor is it atypical when it comes to hiring a professional to sell your property. When you sign a contract with a RealtorⓇ, for example, this often includes a clause that gives that professional exclusive rights to list and sell your home. The National Association of REALTORSⓇ (NAR) formally defines an Exclusive Right to Sell Listing as a “contractual agreement under which the listing broker acts as the agent or as the legally recognized non-agency representative of the seller(s), and the seller agrees to pay a commission to the listing broker.”  

In other words, giving your Realtor the exclusive right to sell your home means they, and they alone, can sell your home and earn a commission from that sale. This obligation is effective during a reasonable and specified listing period. It is, effectively, a layer of protection for your agent. Sale commissions are how they earn a living, after all.

Exclusive Right to Sell Schemes

The issue put forth by the CAR has to do with unfair right to sell schemes that victimize both homeowners and real estate professionals. In these schemes, a company offers fast cash financial assistance to a homeowner in exchange for exclusive rights to sell their home, when the time comes. 

Unbeknownst to the homeowner, the exclusive right to sell extends for years, even decades in some instances. In the meantime, the listing company also places a lien on the property in their favor, trapping not just the current homeowner but any future homeowners as well. 

Obviously, this is problematic for real estate agents, who depend largely on home sale commissions to earn their living. Having companies monopolize listing rights for generations is unscrupulous and unfair, to say the least. It is also predatory on homeowners, who sign these contracts in good faith only to find they are stuck in a contract for the next forty years in exchange for the promise of quick financial assistance. 

Senator Nick Hinrichsen and Representative Meg Froelich worked with the Colorado Association of REALTORSⓇ to draft legislation that will curtail these business practices. Bill 077 passed both the House and Senate with resounding success. Once signed by Governor Polis, brokers will no longer be legally allowed to place any liens on property, nor will contracts extend beyond current homeowners. Any exclusive rights to sell will be only with the express knowledge and permission of the property owner. 

Choose the Right REALTORⓇ to Sell Your Home

Finding the right person to sell your home is essential in achieving the best possible outcome, both financially and emotionally. If you are looking to sell a home in Colorado, contact Jennifer Gaines with the Gaines Advantage. Jenn is a top-selling agent with Exit Realty, a brokerage dedicated to fostering compassionate, knowledgeable, and dedicated real estate professionals. Jenn works with an entire team of skilled contractors who will get your home in perfect condition to sell at the highest possible price. Call or go online today to get started.  

Denver CO Real Estate Jennifer Gaines The REALTOR® that WORKS for you! #thegainesadvantage Specializing in matching people to homes and professional home new build and resale services in Aurora, Castle Rock, Centennial, Parker, Elizabeth, Franktown and surrounding areas. While helping you find the home of your dreams or sell your home for top dollar, your experience will be beyond phenomenal. Get the Gaines Advantage today and call or text me: Jennifer Gaines 303-906-8218 TEXT soldbyjenn TO 85377 to receive my mobile business card.   JenniferGainesReviews 

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Jennifer Gaines

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