Like every industry, real estate has its own set of ‘buzzwords’ that confuse you or create panic when misunderstood. Let’s take exclusive listings as an example.
Do you really know what an exclusive listing is and why it’s so important?
Table of Contents
Exclusive listings are commonly known as off-market listings or pocket listings. Don’t get confused if you see these terms used interchangeably. Some sellers prefer exclusive listings to public listings – especially those who are concerned about their privacy. Buyers on the lookout for exclusive properties or great deals can maintain great relationships with real estate brokers to access their clients exclusive listings.
In this blog post, I share a real estate agent’s perspective on exclusive listings, the role they play in the real estate market, and why they can be so important to facilitate a particular real estate transaction.
What You Really Need To Know About Exclusive Listings
What Is An Exclusive Listing?
An exclusive listing agreement is a contract between a seller and a real estate agent where the real estate agent takes over all the home selling & marketing activities – bypassing the Multiple Listing Service (MLS). Every exclusive listing is uniquely governed by its own terms and conditions. It is very common for sellers to list their property exclusively when they don’t want their addresses exposed on the internet. Think of high-profile or high-net-worth individuals, but exclusive listings have become more common in the last few years among more modest Toronto homes.
Are Exclusive Listings Allowed In Ontario?
As of today, exclusive listings are allowed in Ontario. In 2022, the Canadian Real Estate Association (CREA) announced a new policy mandating home sellers to list their property for sale publicly on MLS – after just three days of exclusive listing. The proposed change was said to be implemented from 1st January 2023. However, due to negative criticism from real estate agents and professionals across Canada, CREA decided to postpone the implementation of this ‘proposed policy’ and will review it during their annual general meeting scheduled to take place in spring 2023.
How To Find Exclusive Real Estate Listings In Ontario?
By now, you probably know that you cannot find exclusive real estate listings on public sites like MLS. Exclusive listings are private and generally, it’s just the seller’s agent who is aware of the listing. The best way to find these listings is to improve your relationship with real estate agents – and other professionals too. There are a number of ways that you can go about this:
Find real estate agents or agencies on social media and connect/follow them to keep up to date with their content. Slide into their DM’s and ask them about their exclusive listings.
Sign up for email newsletters. All agents these days have newsletters to share special offers and new listings with their clients. If you’re worried about spam – create a separate email id. Use that to sign up to all newsletters. You can transform your inbox into a personalized, real estate investment repository.
Google search for local real estate agents who specialize in exclusive listings in your area. Contact them by mail, chatbot or call – whatever you’re comfortable with most!
What Are The Benefits Of An Exclusive Listing?
Privacy: Sellers who do choose to list their home via an exclusive listing generally do so to protect their privacy. For one reason or another (which we cover in detail below), the seller may want to restrict viewings or sell to a specific person. This is a popular option for celebrities, politicians, and well-known clients who would rather not have their addresses on the Internet due to security reasons.
Full Control: When you choose to list a property exclusively or privately – you’re reducing its reach. Since it’s not listed on MLS and publicly listed, only a few real estate agents and potential buyers will have access to your listing. But what you do retain is total control of the real estate transaction.
Qualified Buyers: Control allows you to show your property to a select group of prospective buyers who you can then qualify before inviting for a viewing. Exclusive listings give you more control in deciding who the next property owner is going to be.
Which Sellers Benefit From Exclusive Listings The Most?
Celebrities or high-profile public personas who value their privacy and do not want their personal life exposed to the public
Couples who are undergoing a divorce and are looking to sell their property during separation but don’t want to make too much noise
A severely ill property owner forced to restrict excessive viewings and complete a quick real estate transaction
People who have a lot of valuables stored at home – like antiques, collector items, etc. – tend to be more selective with their viewing
Unique pre-construction assignment sales which cannot be listed on MLS as per the developers’ instructions
Anybody who wants to have full control over all aspects of the real estate transaction
What’s The Benefit Of Exclusive Listings For Buyers?
In a highly competitive real estate market like Toronto, it may be easier to skip the queue and buy an exclusive listing directly from a sellers’ real estate agent. The advantage is that you are able to connect with the seller and put an offer in quickly without having to compete with too many other offers. You avoid bidding wars and save your hard-earned money. I recommend working with a real estate agent who has a strong network and reputation to help you find the right exclusive listings!
What Are The Cons Associated With An Exclusive Listing?
Lack of exposure: One of the biggest downsides to exclusive listings is the lack of exposure. When selling your home, the more exposure the better. Marketing is a crucial component in selling your home if you are looking to get the most amount of money. Finding the highest price for your home often comes from exposing it on a large scale to a large network of people. In Toronto, where bidding wars are common, the high demand ends up increasing the purchase price of your property – which ultimately results in you receiving a lot of money for your home.
Limited online presence: When you list exclusively, your listing will not show up online and therefore typically results in a more private sale. Unless the real estate agent has their own website where they post their listings. Their website better be SEO optimized or your exclusive listing risks being invisible on the Internet.
Slow process with low ROI compared to public listings: Having a public listing can help you sell a property faster and for more money. There are thousands of realtors in the GTA and they literally know potential buyers for all new properties listed. When you list exclusively it is crucial to ensure you work with a well-known Real Estate Agent in Toronto who has access to a large network of suitable buyers and agents. The strategy to sell a particular property varies from one to the next. Every property is different. All the homes listed on MLS do not receive multiple offers. Despite all the noise about Toronto’s bidding wars!
Comparing Exclusive Listings Vs Non Exclusive Listings
Types Of Listing Agreements
Exclusive Right to Sell Listing: This type of listing agreement ensures that the real estate agent receives a commission for the sale of the property, regardless of whether it is sold by the agent or the property owner.
Exclusive Agency Listing: In an exclusive agency listing, the real estate brokerage is only compensated if they are the ones who helped sell the property. If the property owner sells the unit without the agent’s help, no commission is earned.
Open Listing: An open listing agreement allows sellers to work with multiple agents. However, the seller is not obligated to pay any of the real estate brokers unless they played a significant role in facilitating the real estate transaction.
Net Listing: In a net listing, the real estate agent is entitled to keep any amount above the owner’s desired sale price as their commission. It’s illegal in certain states in the USA. In Canada, while there are no clear laws regulating net listings, real estate agents who push clients into agreements to maximize their commission risk losing their trading license. What I’m trying to say is to be cautious with net listings!
Exclusive Listing Vs MLS Listing
As a top luxury Real Estate agent in Toronto with nearly twenty years of experience, we know what it takes to sell your home. Book a call with us today if you have any questions! Selling your home is an important decision and we provide everything you need from start to finish. My experience selling every type of home across Toronto will be your competitive advantage in the market. Download our Sellers guide today to get started.