Exclusive right to sell listing

Key Takeaways

• Under an exclusive right to sell listing the listing firm earns the listing side commission during the term no matter who produces the buyer, including the seller.
• An exclusive agency listing looks almost identical but lets the seller sell to a buyer the seller found and owe the listing firm nothing.
• RCW 19.36.010(5) makes an agreement employing a broker to sell real estate for a commission void unless it is in writing and signed by the party to be charged.
• RCW 18.86.020 requires the firm to enter a services agreement with its principal, and that agreement must state the term of the agreement.

What It Means

An exclusive right to sell listing is the listing form that gives one firm the sole right to earn the listing side commission during the listing term, no matter who produces the buyer. If the listing broker sells it, the firm is paid. If a cooperating firm sells it, the firm is paid. If the seller's own coworker walks in off the street and buys it, the firm is still paid.

That last piece is the point of the form, and it is what separates it from the other listing types. Under an exclusive agency listing the seller keeps the right to sell it themselves and owe nothing. Under an Open Listing the seller can hand the same property to several firms and pays only the firm that produces the buyer.

Sellers sometimes read the exclusive right to sell as one sided. In practice it is the trade that funds the work. A firm that knows it will be paid will spend on photography, staging advice, syndication, and open houses, because the commission is not going to evaporate the week before closing. Washington's Listing Agreement rules then supply the paperwork that makes the promise enforceable.

How It Works in Washington

Two Washington rules control the paperwork. RCW 19.36.010 puts listings inside the statute of frauds: an agreement, contract, or promise is void unless it is in writing and signed by the party to be charged, and subsection (5) names an agreement authorizing or employing an agent or broker to sell or purchase real estate for compensation or a commission. So the listing has to be written, has to identify the property, and has to state the compensation and the promise to pay it. An oral exclusive right to sell listing is not a weak listing, it is void. RCW 18.85.331 closes the door from the other side: no suit for a commission may be brought without alleging and proving the plaintiff was licensed before offering to perform the transaction.

RCW 18.86.020 adds the second layer. A firm must enter a services agreement with the principal before, or as soon as reasonably practical after, its appointed broker commences rendering real estate brokerage services. That agreement must include the term of the agreement, the broker appointed as agent for the principal, whether the agency relationship is exclusive or nonexclusive, and the principal's consent, separately initialed, to limited dual agency. Washington firms sign the listing and the Written Services Agreement terms together, which is why the modern seller listing packet is longer than it used to be. Notice what the statutes do not do: they do not make the listing firm's commission depend on Procuring Cause, and that is the whole reason a seller signs this form instead of an open one. Washington's written services agreement rules walk through the newer agency requirements, and the NWMLS listing agreement revisions cover how the forms changed.

Example

Dana Whitfield lists her Tacoma house at $610,000 with Harborline Real Estate on a 90 day exclusive right to sell listing. The listing side is 2.5 percent, or $15,250 at full price. Her broker, Sam Ortiz, puts it in the multiple listing service and 14 buyer firms tour it.

On day 52 Dana's coworker offers $598,000 with no broker on the buyer side. Because the listing is an exclusive right to sell, Harborline still earns the listing side commission on that sale, 2.5 percent of $598,000, or $14,950. Had Dana signed an exclusive agency listing instead, that same coworker sale would have closed with nothing owed to Harborline. Same house, same buyer, same price, and a $14,950 swing driven entirely by which listing form Dana signed on day one.

Common Mistakes and Exam Traps

• Exclusive right to sell and exclusive agency are one phrase apart. Exclusive right to sell pays the firm even on a seller found buyer; exclusive agency does not.
• The word exclusive refers to the firm, not to the buyer pool. Brokers from other firms still show and sell the property during the term.
• Procuring cause fights belong to open listings. On an exclusive right to sell listing the listing side commission is owed regardless of who found the buyer.
• An oral listing is void under RCW 19.36.010, not merely hard to prove. Do not choose the answer that says a court will imply the missing terms.