Legal Definitions - open listing

An open listing is a type of real estate agreement where a property owner allows multiple real estate brokers to market and sell their property simultaneously. Under an open listing, the owner also retains the right to sell the property themselves without owing a commission to any broker. A commission is only paid to the specific broker who successfully finds a buyer and completes the sale. If the owner sells the property independently, no commission is due to any of the brokers.

Here are some examples to illustrate an open listing:

• Residential Property Sale: Sarah wants to sell her vacation condo. Instead of signing an exclusive agreement with one agent, she informs three different local real estate agents that they are all welcome to try and find a buyer. She also puts a "For Sale by Owner" sign in the window and lists it on a popular online marketplace herself.

  Explanation: This is an open listing because Sarah has engaged multiple agents, and she has also reserved the right to sell the condo herself. Only the agent who successfully brings a buyer and closes the sale will earn a commission. If Sarah sells the condo directly to a buyer she found through her own efforts, no agent receives a commission.

• Commercial Property Sale: A small business owner, Mr. Chen, decides to sell his vacant storefront property. Instead of signing an exclusive agreement with one agency, he informs three different commercial real estate firms that they are all welcome to show the property and bring potential buyers. He also advertises the property on his company website and through local business networks.

  Explanation: This illustrates an open listing because Mr. Chen has allowed several different firms to market his property concurrently. He has also kept the option open to find a buyer through his own efforts. The first firm to secure a ready, willing, and able buyer and close the deal will earn the agreed-upon commission. If Mr. Chen finds a buyer through his own advertising, he owes no commission to any of the firms.

• Undeveloped Land Sale: Maria owns a plot of undeveloped land she wishes to sell. She contacts two different real estate brokers who specialize in land sales and tells them both they can list the property. She also places an ad in a local agricultural newspaper and tells her neighbors that the land is for sale.

  Explanation: This is an open listing because Maria has permitted multiple brokers to market her land. Crucially, she has also retained the right to sell the land herself (e.g., to a neighbor or through her newspaper ad). Only the broker who ultimately secures the buyer and facilitates the transaction will receive a commission. If Maria sells the land directly to a buyer she found, no commission is paid to either broker.