One trend you might note across many towns lately is the shortage of inventory. Most of the towns in our local area have fewer homes on the market today than the same time last year. For example, in March 2017 Chatham Boro, Maplewood, Millburn and West Orange all had more than 25% fewer homes on the market than at the same time last year. Madison, South Orange and Glen Ridge all had more than 40% fewer homes on the market! That’s a staggering shortage. I can attest to this personally, as I currently have a number of buyers wishing there were more homes to look at and listings garnering multiple offers in the double digits. With the inventory of active homes on the market very low some brokerages are using exclusive listings to gain market share.
What is an exclusive listing and does this benefit you as a seller? An exclusive listing generally means that a property is not placed on the local multiple listing service. In some cases, the listing brokerage will “cooperate” with agents from other brokerages. In other cases the listing brokerage will only allow agents from their company to show the property and a “waiver of broker cooperation” must be signed by the seller. This waiver clearly states that limiting such cooperation will limit the exposure of your property potentially resulting in a lower price or taking longer to sell.
In some cases an exclusive listing can be a handy tool—for example:
-if a property is in poor condition and open showings might be hazardous to agents and buyers
-if the seller for, health, mobility or security reasons, wants fewer showings by a limited group of agents
-if the seller wants to test a high price for his/her property without the wider market knowing about this price
In my opinion, the application of exclusive listings should be limited. As a seller be sure you are aware that if you sign an exclusive agreement you will never truly expose your property to the entire market and will never know what it could have sold for if you had. In sum, exclusive listings, especially when not fully explained, may benefit a brokerage but not the client to which they owe a fiduciary duty.