What is an “exclusive” listing anyway?
An “exclusive” listing is one which is not listed on MLS® but is being marketed by a single Realtor, who has a signed listing agreement from a seller, allowing/directing them to market the property. (by law, Realtors must have written instruction from a seller to market their property) In balanced markets or buyers markets, it is rarely used, as one of the many strengths of the MLS® system is to generate the widest possible exposure and this it does via an MLS® listing on the realtor.ca site and affiliated real estate websites in the realtor.ca ecosystem or network. By employing the “exclusive” listing, the listing sales person and brokerage are not posting the property on realtor.ca and instead are relying on only their own marketing efforts to find suitable buyers for the property. It has historically meant that other Realtors are not providing buyers for the property, so in essence, that listing is proprietary or exclusive to the listing agent and brokerage.
While there are some circumstances where the exclusive listing makes sense, it is impossible for a single agent or brokerage to generate the same interest or number of buyer prospects as can be generated by the other 3,000 sales people in our Board and the ubiquitous online power of realtor.ca and its affiliates.
So why are we seeing more exclusive listings in our current market?
Our listing starved market has spawned the ever increasing use of holding back offers and bidding wars, due to the imbalance of supply and demand. This means that properties are selling very quickly and there is also a relatively limited level of listings available for real estate professionals to represent.
This brings a couple of challenges for Realtors who typically “list to exist”: The shelf life and personal marketing/advertising value of each listing to the Realtor is greatly diminished. It does not allow much time to be able to leverage that listing to gain ancillary prospects, who contact the listing agent and even if they don’t buy that particular property, could end up buying another or listing their current property with that Realtor. The exclusive or non MLS® listing, gives the listing agent the opportunity to leverage that property and try to gain a buyer to “double end” the sale or generate additional buyer or seller prospects. With high demand and use of social media and other advertising/market campaigns, the listing agent can generate additional footsteps or buyer traffic to their own “store” (so to speak)
Secondly, with many properties selling in only a few days, it is important to get as many people as possible exposed to the listed property prior to the offer date. The “exclusive” listing is most commonly used in this market, simply as a “pre-marketing” campaign and this is one sees so many of those “Coming Soon” sign toppers on For Sale signs. Listing agents publish the listing a week or two (sometimes more) ahead of the anticipated MLS®/realtor.ca launch date on their own websites and other marketing channels, including a large variety of online realtor groups that act as a portal for such properties. Savvy buyer agents stay on top of these on a daily basis.
Why exclusive is not really exclusive these days!
this pre-marketing of the non-MLS® listing is done under the contracted agreement called an “Exclusive” (as opposed to an MLS® ) listing but will in most cases contain provision for a payment to a co-operating brokerage and salesperson who brings a buyer to the property during the pre-marketing period. So while the type of listing falls in the “exclusive” category, it does not really preclude other Realtors from participating and bringing their buyer to the property. This can vary by listing, however, so buyers should have their buyer representatives contact the listing agent when they see a For Sale sign that shows the words “Exclusive Listing” &/or “Coming Soon” Note: Buyers please try to stop and get the address and name of the listing agent on these signs. We frequently see on our Realtor groups, postings that say something like: “my buyer saw a coming soon sign on Smyth Rd., does anyone know who is listing that property?
“The secret or off market listings” spiel:
Creative buyer representatives are often spinning their services as being unique in having access to listings “not yet on the market” and use this as a ploy to generate buyer (and seller) leads. In a market where we have a dire shortage of listing inventory, it is understandable that some buyers will succumb to this type of mantra but most will recognize it is simply a slick sales pitch.
Buyers should always consider Exclusive listings, sellers not so much: A buyer should definitely go and see any property that meets their requirements (if allowed) but should be careful not to sign any representation agreement that binds them to that particular listing agent. Some agents may ask you to sign a “Buyer Representation Agreement” if you want to see this special property to which “only their buyers have access”.
Sellers should rarely consider accepting an offer via an exclusive listing unless it totally blows their minds. Why? Because until you have exposed the property to the complete market via an MLS®/realtor.ca listing, then you don’t really know what the true market value is and that seller could well be leaving “money on the table”. Granted there could be situations that warrant an exclusive listing and sale and whatever a seller and their listing agent agree is fair ball. However, a seller should be 100% sure they are getting full market value and not simply a quicker sale, double-ended sale or are being used to generate more clients for their listing agent.
Does a listing agent advertise their listings or vice versa?
A good way to tell if a Realtor advertises their listings or uses their listings to advertise themselves, is to look at previous or current listings and marketing materials and see whether the property or the listing agent is most prominent. In many cases, it is clear that the listing agent accomplishments, photo, logo, tag line etc. are more enhanced than the particular property being marketed. Does the listing agent leave out key information like address or selling price or interior photos? This can be a key clue, as it means the ad is intended to generate enquiries not simply sell the property.
We like using the Exclusive listing and “Coming Soon” marketing as a pre-announcement (assuming our seller is in agreement) but only a relatively short time ahead of the MLS® launch. (perhaps a week ahead) During that pre-announcement period we can then advertise the property via our own channels and generate interest but we typically do not provide access to the property to any buyers during this time. Making the property available for showings with the MLS®/realtor.ca posting, is to us the most sensible way to provide equal access to all buyers and generate the maximum marketing opportunity for our sellers and thus generate the best market value possible. While it is nice if we generate additional prospects, it is a totally secondary issue, though we would not say this is true of all Realtors and we believe too many are trying to manipulate sellers for their own ancillary purposes by leveraging the listing and the exclusive listing process in a way that is not always in the best interest of the seller.
So sellers should be a little leery of the ulterior motives of a prospective listing agent pitching the Exclusive listing and buyers should likewise be very careful about signing up to see the exclusive listing, private listing, pocket listing or off market listing being touted by some agents.
Gord McCormick, Broker of Record
Principal Broker, Ottawa Real Estate Board
Dawn Davey, Broker
Oasis Realty Brokerage 613-435-4692