Contract choices vary when selling a house

Q. Dear Rick, I plan on selling my home this summer. I know you always suggest hiring a real estate broker when selling a house — but what type of contract should I sign with them? Julie — Falmouth.

A. This is a good question. There are basically three types of brokerage sales contracts you can sign.

The first is an open listing contract, where you retain the right to sell your home yourself, but are allowed to give a number of brokers information on your property so that they can show it to prospective buyers. With this type of contract, if your home is ultimately sold to one of the buyers guided to the property by a broker, you will have to pay them a commission. The major drawback to signing an open listing is that few brokers will focus on selling your house because the chance of them earning a commission is slim.

The second type is the exclusive agency agreement, where you sign an agreement with just one broker and make them the exclusive agent for the sale of your home. In this case, the broker will usually assume all responsibility and costs associated with marketing and advertising your home. However, you will still retain the right to sell the home yourself, though you usually can’t advertise it. Similar to open listings, you will only have to pay a fee if your home is sold to a buyer presented by the broker and you may have a harder time finding a committed broker because they’ll be worried you’ll just sell the home yourself.

Finally, there’s the exclusive right to sell agreement. Here, you sign a contract with one broker and give them the exclusive right to market and sell your home.

And, as long as a buyer is found and a contract that ultimately leads to a finalized sale of your home is signed, the broker is entitled to a preagreed upon commission.

With few exceptions, an exclusive right to sell agreement is the best real estate brokerage contract to use because it optimizes a broker’s chance of earning a commission and will have them treating your home as one of their top priorities.

Good luck!