From Listed to SOLD - How to Sell Those Listings You Work So Hard to Get!

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What if My Seller Asks for a 'Listing Exclusion?'

For those who haven't encountered a "listing exclusion" yet, it's simply a request from a seller that if a certain person or persons buy the home after it goes on the market, your listing commission won't apply. For example, perhaps the seller knows a guy at work who says he'd be interested in purchasing the house, but he's still thinking about it. Your seller doesn't want to wait for him to make up his mind to go on the market, but neither does he want to pay you if the guy actually ponies up. So, the seller asks you to "exclude" this particular person from your listing agreement.

Should you do it?

My advice? Sure. Don't argue, don't explain, and don't make a big deal out of it. Write in the exclusion and get on with putting the house on the market. The chances that this guy is actually going to purchase the house are slim, but if he does, the seller will probably need your assistance to get the contract written and to closing. For which you most certainly may charge a reasonable fee.

No reason to go to battle over this. Save your energy for bigger things!

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Comment balloon 115 commentsJennifer Allan-Hagedorn • May 31 2009 08:09PM

Comments

yeah, we do it all the time, give that person 45 days to close and then no exclusion after 45 days.

Posted by Angela Lawrence, Broker/Owner (Noble Merit Real Estate Services) over 10 years ago

Hey Jennifer,

Haven't hit this yet, would you also discuss the paperwork prep fee and put it into the exclusion?

 

Posted by Bill Saunders, Realtor®, www.BillSellsHotSprings.com (Meyers Realty) over 10 years ago

Jennifer, you have very valid points.  I encounter listing exclusions periodically.  Limit the exclusion period and agree upfront on a fee if you assist the seller with respect to offers made by the excluded parties.  If the seller thought that the excluded party was extremely likely to buy the property then it is unlikely that it would be listed.

In ICI properties, current tenants are often excluded.

Posted by FN LN over 10 years ago

It is a reasonable  request so I have done it in the past.  And, like you said, no one on the exclusion list has bought one yet!

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) over 10 years ago

Frankly, I'd just agree to the exclusion and leave it at that. Seriously - when you're doing listing paperwork and getting a house ready to go on the market, there are so many other things to talk about - I'd hate to get bogged down in what will probably be an irrelevant subject.

I don't even discuss what my fee would be upfront - again, mainly because I don't want to waste our time and energy on it. And, what I charge if this ever came to pass would probably depend on the situation at the time.

The reason the seller is asking for the exclusion is because he doesn't yet recognize your value over and above marketing the home. He probably doesn't realize that he'll desperately need your help getting this to closing. If you try to pound him over the head with this before he's ready to believe you, you'll probably end up in an argument.

I guarantee... if the buyer shows up in three weeks and wants to buy the house, the seller will suddenly realize how little they know about the process.. and they'll ASK you for help! It's so much better that way...

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) over 10 years ago

Good advice. We would go with the exclusion and not worry about it.

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Posted by Roy Kelley (Realty Group Referrals) over 10 years ago

I have had this happen a couple of times, put it in the listing agreement and promptly forgot all about it because that "friend, neighbor, coworker" never seems to materialize.  I have never heard another agent say it has ever happened to them, either.

Sometimes I wonder if there was any real interest in the first place or if the friend/neighbor/coworker made a comment in passing the seller took way too seriously. 

Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) over 10 years ago

I have done this several times during my career. Have yet to have had the excluded party actually purchase. Good advise to just put it in and not get into a lengthy discussion about how to handle some thing that will probably not happen any way.

Posted by Jim Palmer, Washington County, Florida (Chipola Realty - Chipley Office (850) 638-2777) over 10 years ago

I have no problem with a named exclusion; however like the Lawrences said I want a time restriction.  I don't want to market the house for five month and then their potential buyer deciding to buy.  I think thirty days is long enough for them to make a decision.

Posted by Richard Weeks, REALTOR®, Broker over 10 years ago

I have given listing exclusions with out a blink of an eye. AND I have had them in contracts for stuff I sold pre real estate. So I am with you on this

Posted by Charlie Ragonesi, Homes - Big Canoe, Jasper, North Georgia Pros (AllMountainRealty.com) over 10 years ago

I too have had listings with exclusions in the past.  I do add a timeframe and it benefits the seller as well to put a little pressure on the potential buyer by saying that they have 30 days to come forward with an offer, if they are really serious and qualified, they will do so. 

Posted by Beth Anderson, Realtor - Tecumseh / Lenawee County (Goedert Real Estate) over 10 years ago

I've had this problem with BUYERS when I was very new.  Someone was looking for a high-end home and I was THRILLED that they I got the "call" on uptime.  But these were the type of buyers I later learned to avoid like the plague.   They had their ear to the ground apparently,  and were running around getting themselves signed in as "exclusions" for every home they could find that was coming on the market.  The result was that only about half of the viable properties were properties that they would be "forced" to work with an agent on. They were doing everything they could to get out of any kind of commission.  They felt they didn't "need" an agent if they found it themselves and were ready to negotiate the deal themselves.  They were also agent hopping.  I got suspicious when they only wanted to see homes that were listed with my brokerage! Sure enough, the bought with a broker....who was with the listing brokerage.  My guess is they squeezed hard on the commissions.

This is why an EBA works wonders.  If you can't develop client loyalty after two times out with them - the chances they will buy with you are miniscule.  Don't waste time and gasoline on freeloaders.

As to having it in the contract on a listing - sure - but only for about 3 weeks.  I can't spend marketing money only to have an "exclusion" show up six months later and cut me out of the action.

Posted by Ruthmarie Hicks (Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605) over 10 years ago

I have done the exclusion on a listing agreement.  As it turned out the "buyers" were referred to me after the house went under contract quickly.  As it turned out, I spent a lot of time with them and they were not able to buy immediately so once the house they had a rent prior to purchase fell through, and they couldn't get another builder to negotiate, they ended up finding another rental.

Posted by Kim Peasley-Parker (AgentOwned Realty, Heritage Group, Inc.) over 10 years ago

I'll do an exclusion w/a timeline...30-45 days max.

Posted by Coleen DeGroff, Haile Plantation Real Estate - Gainesville FL (eXp Realty) over 10 years ago

Happens once in a while.  Good advice to get a specific name of a potential buyer and a specific time-frame.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) over 10 years ago

We have also accommodated Sellers with an exclusion for a 30-day period. The people have never bought the house. The odds are in our favor.

Sharon

Posted by Sharon Alters, Realtor - Homes for Sale Fleming Island FL (Coldwell Banker Vanguard Realty - 904-673-2308) over 10 years ago

Jennifer,

Agreed! I have had this happen a few times and the excluded person did not buy the properties

Posted by Monique Combs, Royal Shell Real Estate - Monique Combs (Royal Shell Real Estate ) over 10 years ago

I have done this a few times with FSBOs and each time I was paid a 1/2 fee to handle the transaction.

Posted by Eric Reid (Renaissance Realty Group of Keller Williams Atlanta Partners) over 10 years ago

I've never been asked to do this, but it does sounds like a reasonable request and I'm glad to know that it's okay to do.

Posted by Ann Allen Hoover, CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL (RE/MAX Advantage South) over 10 years ago

I've done a few too and never have I heard of someone purchasing the home they said they would buy privately.   It is horrible to see a seller getting their hopes up!

Posted by Susan Emo, Kingston and the 1000 Islands Area (Sotheby's International Realty Canada - Brokerage) over 10 years ago

I have heard from my broker that you should only give the excluded party or parties 2 weeks to come forward with an offer.

Posted by Jonathan Hall, Realtor - Danbury,CT Area Real Estate~203-417-0523 (William Pitt Sotheby's International Realty) over 10 years ago

Jennifer, I always put a limited timeframe on any exclusion.  I ask the question, "How long do you think it will be before you know one way or the other about their decision?" and then write into the exclusion that it is good only until that date.  I explain that having a deadline in there will help provide some urgency for their prospective buyer to act.  Great topic for a post!

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) over 10 years ago

Great topic!  It is interesting to hear what others have to say about this.

Posted by Cristina McBreairty, Realtor, CDPE, SFR (Century 21 Nortrh East) over 10 years ago

Never had it come up.  This is a first for me. 

Posted by Angelia Garcia (Pure Realtors) over 10 years ago

Yes, an exclusion with a set time limit is OK.

BUT...

An incident happened where a certain buyer was the exclusion.

That same buyer wrote an offer with a buyer's agent - who expected to be paid the % that was offered in MLS.

But the seller was not obligated to pay the agent because the buyer was excluded from the listing.

Or was he?

Should the excluded buyer's name be in the private remarks?  Is that a violation of the buyer's privacy?

Hmmm.....

Posted by Virginia Hepp - Mesquite NV REALTOR, Mesquite NV Homes and Neighborhoods - Search MLS (Desert Gold Realty - Mesquite NV Homes For Sale) over 10 years ago

I always respect the sellers when they want an exclusion.

Posted by Nannette Hilliard, CDPE, ABR, CRS (Century 21 Zwygart Green County Real Estate) over 10 years ago

I would want a much shorter time exclusion ... 21 days max. I am putting a lot of time/ effort/ money into marketing a property. There is no point in doing that with an exclusion clause.

Posted by Bob Foster (Century 21 Lanthorn R. E. Ltd. Belleville, Ontario) over 10 years ago

I totally agree. It's highly unlikely that the seller will procure a buyer. However, when I do allow an exclusion, 99% of the time, it's for the seller to sell to a particular buyer. So my clause is for the seller to be able to sell to that particular buyer, by a specific date (I explain that in order for me to put my full efforts and many hours of time into marketing the property, I need to know that I'm not going to do all that work, only to have the listing pulled. So I need an end date for the clause.) and we decide how much they'll pay me, based on how much work I'll be doing for them and their buyer, and I discuss how the laws of representation can change under these circumstances. Believe it or not, the clause is fairly short. The sellers almost always reach the same conclusions, and I'm used to writing the added clause, so it's really just a matter of explaining it all to the sellers =)

Posted by Lisa Hill, Daytona Beach Real Estate (Florida Property Experts) over 10 years ago

Jennifer,

I've done it twice for a 30-day period but also specified in the listing agreement that I wasn't going to do full-marketing during this time.  No pricey mailings, no enhanced websites, no luncheons.  Sellers understood fully.  (Neither exclusion ponied up, so I did go to town and sell the homes.)

Posted by Irene Kennedy Realtor® in Northwestern NJ (Weichert) over 10 years ago

I give them 10 days to make an offer. If no offer is procured within those 10 days, the exclusion no longer applies. Any serious buyer can get it together to make an offer within 10 days.

I once had a listing where the next door neighbor decided to make an offer after the home was on the market for 60 days. The seller wanted me to exclude him because they had apparently been in discussions with that buyer for years. The sellers did not exclude that buyer from the listing agreement. To settle it amicably, I gave them a slight break on the commission to make the transaction work as the offer was considerably under list price.

sacramento agent

Posted by Elizabeth Weintraub Sacramento Realtor Top 1%, Put 40 years of experience to work for you (RE/MAX Gold) over 10 years ago

A time limit of two weeks is plenty if you do an exclusion.  I'll never forget having a house listed and the seller added all the names he's shown while it was a FSBO.  The names were buried in the file and all of a sudden one of them looked at it with a realtor and made an offer.  The agent had been able to "overcome" the objections.  When I presented the offer, the buyer pointed out that they were excluded!  What an education I got.  I think I talked him into paying the buyer's agent but I got zilch which is what I deserved.

 

Posted by Barbara S. Duncan, GRI, e-PRO, Executive Broker, Searcy AR (RE/MAX Advantage) over 10 years ago

Virginia brings up a very interesting situation. I would like to know how that turned out for her..or if any one else has ever experienced that situation.

Posted by Jim Palmer, Washington County, Florida (Chipola Realty - Chipley Office (850) 638-2777) over 10 years ago

I have done this before and always add a time frame. I tell my seller that the time frame will help them find out real quick how serious their prospective buyer is. They always seem to disappear. But if they ever re-appear after 30-60 days, I'm covered.

Posted by Greg Miller, Florida Home Loans - Conventional,FHA,USDA,VA (Ruoff Home Mortgage ) over 10 years ago

Our MLS now has a little check to indicate an excluded buyer. Never had to use it. Great advice. It needs to be explained, but there's too much else to talk about so why nitpick your sellers.

Posted by Linda Jandura, Realtor, North Carolina Buyer & Seller Specialist (Raleigh Cary Realty) over 10 years ago

I agree and I have done this before and your right there is no reason to battle on this.

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) over 10 years ago

From personal experience, I would definitely put a short time frame for an exclusion.  I have had an excluded buyer come forth after I've spent good money and time marketing the home.  It won't happen again, and it only needs to happen ONCE for any agent to change their mind on the subject.

Virginia brings up a very good point, too.  What would be the stipulations if the excluded buyer used another agent to make an offer?

Posted by Roger Johnson, Realtor - Hickory NC Real Estate (Hickory Real Estate Group) over 10 years ago

K.I.S.S.   Keep it simple stupid.  I like the non confrontational nature.  Just do it.

Posted by Larry Bettag, Vice-President of National Production (Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001) over 10 years ago

I'm probably deating a dead horse, but yes exclusions are fine, but only with a time limit. 

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) over 10 years ago

I find this very common with investors. No reason not to allow it and in every case I've been party to, the excluded party never comes through. It does go to building trust with the client.

Posted by David Coffman (Exit Realty 1st Choice) over 10 years ago

Jennifer - I agree with you. I don't have a problem excluding a person form  from the listing agreement.

Posted by Robert Schwabe, Orange Park Real Estate (EXP Realty) over 10 years ago

I will exclude someone for a two week period.  After that I'm spending marketing money and it's too late.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) over 10 years ago

Jennifer: I have had this a few times over the years.. I will simply agree and tell them there will be a agreed upon time line. If they purchase by this date.. OK.. If they purchase after this date, they still owe the brokerage fees.

Posted by Roland Woodworth, Q Realty - Power In Real Estate (Q Realty) over 10 years ago
I like the idea of doing it with a 45 day exclusion period.
Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) over 10 years ago

You guys are all nicer than I.  :)

7 days for the exception to produce a written offer.

If they produce an offer after that time period, I will still get paid and credit seller X (small) amount because they procured the buyer. They will still need help, like Jennifer said.

The concern I always have, and discuss with the seller, is do they want to hold the line for a friendneighborfamilymemberyadayada while RWA buyers come and go? They usually will press their exception to move when they realize that the first 30 days of any listing are so critical.

Posted by Candice A. Donofrio, 928-201-4BHC (4242) call/text (Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker) over 10 years ago

Good that you've asked this question, Jen, becasue I've never encountered it and now I know what to do if I do.

Posted by William James Walton Sr., Greater Waterbury Real Estate (WEICHERT, REALTORS® - Briotti Group) over 10 years ago

Hi Jennifer -- I always say no, and I've never had a seller fight me after talking about the pros/cons.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) over 10 years ago

Thanks for all the great responses!!!! To answer a question posed a few times - what about the buyer agent co-op if the buyer has an agent? That is not excluded - whenever I've done a listing exclusion, I always clarify that it is for my side only and if the buyer has an agent, that the seller will still be asked to pay the advertised co-op.

But this does raise a question in my own mind (and since these buyers have never actually appeared, it's never come up) IF the seller doesn't want your help getting the buyer to closing (and you haven't spent much time or money on the listing yet), would you terminate the listing and release yourself from any liability?   Hmmmmmmmm...

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) over 10 years ago

Jennifer, I've written in many exclusions over the years. Not once hasve they bought the house. It's a non-issue.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) over 10 years ago

I don't do exclusions. I tell them up front if they ask me to. I take the listing, hold it until they tell the person they want to exclude they have listed the home and find out if they want to make an offer.

I spend way to much time and money the first week of taking a listing.

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) over 10 years ago

Missy & Others who don't do exclusions... that's cool. There is no right or wrong answer to the question. I just see a lot of agents (particularly newer ones) struggling over questions like this that really aren't worth worrying about - and certainly not being distracted by during a listing presentation.

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) over 10 years ago

I will exclude but only for 1 week. It can't take more time than that presuming they have already seen the home. None of my sellers have ever had a problem with one week.

Posted by Barb Szabo, CRS, E-pro Realtor, Cleveland Ohio Homes (RE/MAX Trinity Brecksville Ohio) over 10 years ago

I think it is a reasonable request only when the buyer is not using another buyers agent to buy the home and they let my enter an expiration date in the contract.

When they use a buyer argent the full fee is due....none of my sellers ever had an issue with that.

Bettina

 

Posted by Bettina Settles, Your Indiana Connection over 10 years ago

I agree with many of my fellow commenters that an exclusion is fine as long as it is detailed in length and specific party or parties involved, we encounter this with sellers who were selling FSBO and had their own leads prior to listing with us.

Posted by Morgan Evans, LICENSED REAL ESTATE SALESPERSON (Douglas Elliman Real Estate) over 10 years ago

Jennifer,

I don't see why not. The vast majority of the time it never happens anyway.

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 10 years ago

This has raised alot of discussion. I found this information to be educational. Jennifer, thank you for that.

Posted by Terri Poehler, Coral Springs Real Estate Agent (Realtor) over 10 years ago

Very interesting concept. I don't see what it could hurt if there was an exception for one person.

Posted by Home Loan Search.Online (Home Loan Search Online) over 10 years ago

I have no problems with excluding anyone for 7-10 days.

I tell the seller if they're serious the 7-10 day exclusion will cause them to put a quarter in the phone or get out of the booth and either way they haven't lost anything.

I won't exclude anyone for longer than 10 days.

Posted by Jim Lee, Portsmouth NH Realtor, Portsmouth, NH (RE/MAX Shoreline) over 10 years ago

We like to limit it to 15 days and offer to do the paperwork for them for a reduced fee if they do buy the home.  I've never seen an exception actually buy a home, but they can hold a seller off the market with their false hope for a long time.  We explain to the seller how we are the catalyst for their transaction - either the prospect that is excluded will step up and buy, or they can get on with their life by going forward with a conventional marketing program.  Either way they win ... sign here.

Posted by Jim Valentine (RE/MAX Realty Affiliates) over 10 years ago

Great comments and a great blog as usual Jennifer...

I kind of like Missy's approach. My marketing plan is very front-loaded money-wise and its very, very time-consuming.  I send out tons of open house notices etc - order a lot of products like flyers and cards and I'm still forced to do some print ads in the beginning.  The bulk of the expense and time are in those first two weeks.  Once the listing is on all the web sites and I have the main advertising push out of the way - the rest of the expenses are not that awful.  Allowing them to ask their exclusions - one LAST TIME whether they want to buy is a great idea.  Although I have to say - like everyone else - the exclusions usually don't result in anything.

When I was new, i had to get my first listing by "any means necessary"  This guy had FSBO'ed and had  about  30 exclusions.  Even then I only gave him two weeks to get one to sign.  Guess what?  Not one offer out of those 30!  Most were just blowing smoke.


Also, Jennifer's final question is interesting....If a buyer comes in and has an agent - the seller is STILL going to need to pay said agent.  But if said seller also wants negotiation services and the listing agent has already marketed the house - how much can they possibly save.  Since most buyers shop with agents - hmmmmm.

Posted by Ruthmarie Hicks (Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605) over 10 years ago

Jennifer, wow, this certainly raised a whole lot of discussion, which taught me a lot, thanks for beginning the discussion!

Posted by Joanne O'Donnell (Chic Home Interiors) over 10 years ago

We cannot put into MLS with this kind of exclusion. However I tell Mr. Seller, we will do the listing out of MLS, no advertising and give the buyer a time limit of a week.

This puts pressure on the buyer to either go through with the contract or leave the seller alone.

I  suggest to the seller that the time limit is actually very good for them cause it gives them a very good reason to put in the time limit. They will find out FAST how serious the buyer really is.

Posted by Norma Brandsberg (Marks Realty Co. Inc., Lynchburg, VA, 540-586-9496) over 10 years ago

Several of you have mentioned putting pressure on the buyer to perform - I don't get that - how is the buyer pressured? It's not likely that the house is going to scream off the market the day it goes on, so what difference does it make to the buyer if the seller pays a listing commission or not?

Please explain to idiot me!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) over 10 years ago

Jennifer, over the years I've said sure knowing the chance of them buying was slim to none.  I think there was maybe one in over 20 years....and we came to an agreeement of a higher commision due to the amount of work needed to get the deal to closing. I have no problem doing this....none!

Posted by Anna Banana Kruchten CRB, CRS, 602-380-4886 (Phoenix Property Shoppe) over 10 years ago

I agree that exclusions should be allowed. I also agree iwth the first comment and I always put in writing that a potential buyer perform within a certain amount of time. So far over the years only one has done so.

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) over 10 years ago

While I haven't had an issue doing this, and I agree that you sould.....I do think you should extend the listing date time by a couple of months just in case. This will cover you ....I'm all for covering myself any way I can.

Patricia Aulson/Portsmouth NH Real Estate

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) over 10 years ago

I put a 2 weeks limit on an exclusion. No way I am going to spend time and money just to have the listing yanked from me. I won't list it without a time limit.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 10 years ago

I agree, I would put in an exclusion if my seller asked. I like the idea of helping them with the contract for a fee.   

Posted by Muffy collins over 10 years ago

Hi Jennifer,

I don't even blink and eye. "I can certainly add your interested party as an exemption in this contract for a period of 30 days, after that time frame, his exemption will be void." 

 I specifically write in the addendum exempted party name and period of time exemption lasts. No more than 30 days.  Of the 5 or so listings I have taken with exemptions, not one has ever followed through. In taking a contract with an exemption, I feel the sellers gain even more confidence in me.

Kathy B

 

Posted by Kathy Baker, GRI Tennessee Realtor (Realty 1) over 10 years ago

Great post & comments! And I'm with the many who say sure, no problem - but with a name & deadline of 7-10 days for the excluded buyer to go or no go.  Seems to come up most often with sellers who were trying to FSBO & misunderstood the interest level of buyers who praised their house out of just wanting to be polite...

Posted by Nancy Conner, Olympia/Thurston County WA over 10 years ago

I give them 2 weeks to get an executed contract.  If they have a HOT buyer, they will buy within 2 weeks especially if they think the house is going on the market and they may lose it!  I have never had an exclusion buy one of my listings.  Like Floyd Wickman says when they tell you they have a buyer..."What does a buyer look like???  Do they have a house to sell first?  Are they qualified through a reputable lender?"  The average consumer wouldn't know a qualified buyer if they bit them on the big toe!  That is why we agents all have jobs!  :o)))

Posted by Jeani Codrey, If you're not learning, you're not living! (The Learning Jeani) over 10 years ago

Over the years I have done this numerous times always with a 30 day time limit for their potential buy to act. Never had one person named in the exclusion to buy the property.

Posted by Cameron Wilson, The Short Guy - Murrieta,Temecula,Menifee Californ (Labrum Real Estate) over 10 years ago

Jennifer, you have become Queen of the Feature!  Congrats!!

I see no problems with an exclusion, it has been common practice for as long as I can remember. and the reality is that the average person is NOT a sales person, and will not follow up with that "excluded" person anyway, especially after signing a listing agreement and putting it into your hands.

so, Take the Listing, Just be sure to price it right!!!!!

Posted by Robert Rauf (HomeBridge Financial Services (NJ)) over 10 years ago

I've only had this happen twice in my 9 years, and I don't have a problem with it. However, I don't blindly put it in there. I usually say "within 30 days". That way, if it's 6 months from now and then the friend wants to buy, I still get compensated for all my marketing and effort put into selling it.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) over 10 years ago

I am amazed at how generous many of you are with the timeline.  I give 48 hours - no more, no less!  If they're going to put their money where their mouth is, they need to do it immediately.  After the 48 hour deadline, the gloves are off!   And you're right about developing further trust with your Seller - they love us for 'allowing' this right of first refusal.

Posted by Susan Emo, Kingston and the 1000 Islands Area (Sotheby's International Realty Canada - Brokerage) over 10 years ago

I always tell them "certainly, no problem". "Why don't we have him/her make a decision within the next 5 days". "That way you will know, and I will know to start marketing your home then". About 90 percent of the time they then decide they don't want to wait 5 days for me to start marketing their home. The other 10% wish they hadn't waited. I have never lost a listing because of this, I also have never had an "excluded buyer" perform. I don't market a home with an exclusion.

Thank you

Posted by Scott Baker, Realtor Homes for Sale in Cincinnati, West Chester, Mason, OH Area (www.eHomeReports.com Coldwell Banker West Shell) over 10 years ago

Remember that our sellers don't do this every day. And their request for an exclusion is not greedy or disrespectful - it's simply a reasonable request that any of us would have if the situation were reversed, and we were inexperienced home sellers. Think about it - you show the seller that breath-taking amount of money they're going to pay for your services, and if they don't understand (and most don't) how much work and expertise goes into properly marketing (and more importantly, closing) a listing, they're going to feel overwhelmed. If there truly is someone who has shown an interest in the home, it's only natural that the seller will want "credit" for them, since we're talking about a huge amount of money they're paying us, theoretically to find a buyer.

Even if you refuse to honor the exclusion, please say no respectfully, as you would want someone to say no to you!

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) over 10 years ago

It has happened before but not very often.  Now we tell them to give their friend a couple weeks to make up their mind and then we'll list their house. Usually they are ready to list that day and proceed.

Posted by Team Honeycutt (Allen Tate) over 10 years ago

Great advice.

I try to keep fighting with my clients to a minimum!

As you said, the guy from work probably won't be buying the home anyway.  Why fight it?

Seems fair for a client to suggest it as well.

Thanks for writing,

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) over 10 years ago

I've written exclusions into listing agreements as well, but always with a 14 day time limit for a fully executed contract. The named buyer never materializes, but if they do show up later, I'm covered.

Posted by Lynn Michaels, Marlboro-Manalapan Real Estate (Weichert, Realtors- Marlboro & Manalapan, NJ) over 10 years ago

We usually provide a 30 day period for the exclusion so that we are protected against a 180-240 day listing with all the associated expenses and then the excluded person gets up the courage to actually tender an offer. 

Just our $.02

Posted by AJ Heidmann ~ CRS, YOUR Alexandria & Arlington, VA Real Estate Expert (McEnearney Associates, Inc.) over 10 years ago

Jennifer, I will only give an exclusion if they agree to 14 days.  If their "buyer" can't perform in that time, then they aren't ready, willing and able buyers.  I spend too much time and money up front getting my listings on the market.  When I have done this in the past, I don't spend a dime until the 2 weeks are up.  No pre listing home inspection, no personal web site.  My time is worth too darn much.   I've only done this 2 times and a buyer did not appear, but I don't want to risk it either.

As mentioned above, I never thought about the buyer hiring a buyers agent....then what?  I never even thought about that happening.

Posted by Elizabeth Cooper-Golden, Huntsville AL MLS (Huntsville Alabama Real Estate, (@ Homes Realty Group)) over 10 years ago

I had a listing with an exclusion.....it didn't bother me at all.   We got a contract and settlement is June 4. 

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty) over 10 years ago

I tell them that if the person who is excluded ends up buying the home they will pay 1/2 the commission and I will do everything I normally would. I have yet to have someone say no to this. It is a win-win.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 10 years ago

Had not heard of this -- thank you for posting.  I also appreciate the responses and glad to hear it's not a big deal!

Posted by Rosemary Shirley over 10 years ago

My BOR only allows a 5 day exclusion and the excluded party ot parties must be named in the listing contract. The only work I will do on these is to submit the listing to the MLs ( until the exclusion period has ended.)

Posted by Ron Tiller (Star Referral - Grand rapids MI) over 10 years ago

I'm comfortable with exclusions that specify who's excluded, and for how long. I usually don't go out much longer than 2 weeks. I think that a serious buyer can get it together in this timeframe. But I also agree with those who feel that they front a lot of their marketing expense in the first few weeks of the listing, and don't like the idea of exclusions at all. They might consider a "variable exclusion". The buyer would pay nothing if the deal comes together in the first 7 days (or whatever is agreed upon), and a small fee (maybe 1/2 - 1%) if it comes together later in the game. This would reduce the financial risk to the agent who is ramping up the marketing costs over the first few weeks. Just a thought...

Posted by Harold "Hal" Benz, Helping Home Sellers Preserve Their Home Equity (Local Impact Real Estate Network) over 10 years ago

I dont have a problem with an exclusion, as long as the seller agrees to a time limit on the exclusion. As most have said, many times the 'potential' buyer doesnt materialize. Usually, if they were serious, they would be putting pressure on the seller to wait to list the home.

Posted by Greg Renfrow (Marx-Bensdorf, REALTORS) over 10 years ago

The part that sucks is spending a pantload of money to promote a listing and then have the excluded party buy it...  money gone... 

And the solution isn't to not spend money... but that is how a lot of agent handle their listings.

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) over 10 years ago

I give the named exclusion 14 days from the listing date to make an acceptable offer. chances are they have known the home was going on the market for some time before the actual listing date. if they do not get pre-approved and make an offer in this time frame then they are not serious about purchasing the home. also, any delay in this market is a dis-service to the seller as a potential buyer may be lost as the exclusion ponders there decision.

Posted by John Bressor over 10 years ago

I like the idea of agreeing with conditions.  Maybe you could negotiate to do the contract at that time and/or get some minor compensation for your marketing efforts.  They very fact they list with you puts pressure on this other person to buy.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) over 10 years ago

You are right -- do we really think that the "guy they met on a plane and who 'sounded' interested" is really going to buy ? Not likely .

Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) over 10 years ago

Jennifer you are right, I will take the listings. I will be a great opportunity to get your name out there and market yourself as an active agent in the neighborhood. You may get some lead from the listing too.  Listings are great!

Posted by Anonymous over 10 years ago

Jennifer you are right, I will take the listings. I will be a great opportunity to get your name out there and market yourself as an active agent in the neighborhood. You may get some lead from the listing too.  Listings are great!

Posted by Mayra Espinosa Realtor San Mateo Pacifica Homes, Pacifica -San Mateo,CA Real Estate agent, Buy,sell (Red C Realty| Call 650-996-8961) over 10 years ago

Hi Jennifer, I have, on occasion given a listing exclusion. The excluded party usually doesn't move forward to purchase, although sometimes they do. It's the luck of the draw! If I do give an exclusion, it's only for 14 days as someone either wants to buy & does so or not.

Posted by Marian Gregor-Ann, Arbor area Real Estate (Keller Williams) over 10 years ago

Jennifer, this is a great post. Lots of nuances here, like a buyer working with a buyer agent. I agree with the majority that the named, excluded party rarely if ever buys; I also like shortening the exclusion time--2 weeks sounds good to me.

Posted by Lottie Kendall, Helping make your real estate dreams a reality (Compass) over 10 years ago

Jennifer,

Hello. As always, great advice! What you suggesteed I have done in the past on three occasions,. Exclusions don't bother me as the odds of that purchase panning out are pretty high. After the thirty days are up I  get the excluded buyer's name and I try to help that person purchsse the home or help them find a new home. I kill two birds with one stone sort of speak. as a matter of fact  I just listed a home today and the seller asked for an exclusion. I gave the excluded buyer 30 days to secure financing and buy the home and of course, I did offer my sellers my services if this was to transpire for a fee.

Thanks again jennifer you awesome!

PS: Looking forward to THE SUMMER OF SOUL!

Jeffrey Mangus

WWW.HOMETEAMWV.COM

Posted by Jeff & Amber The Home Team (OLD COLONY REALTORS) over 10 years ago

Jennifer. You are right. The guy from work almost never buys the house. lol

Posted by Mark Velasco, Listing Agent-Whittier & Surrounding ciities (Sharpstone Realty, Inc) over 10 years ago

If the Seller wants an exclusion, I would not list the property until they change their mind.

It shows a lack of respect for the work that I am about to do. i understand that the guy at work never buys the house, but it is starting the relationship on the wrong foot. I am VERY committed to my clients, and I expect the same in return.

- Harrison Painter

 

 

Posted by Harrison Painter, New Media Consultant (GoGladiator Media) over 10 years ago

Yep, happens often.  I do 30 days maximum though.  Never had one of these exclusions buy the home.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 10 years ago

Wow, at this point Jennifer you have 100 comments. Well here is our 2 cents worth anyway!  We accept the exclusion with a 2 week limit.  You are right, we have never had the "excluding" party come through! Go for it was good advice!  

Posted by Al & Peggy Cunningham, Brokers, Our Family Wants To Help Your Family! (RE/MAX West Realty Inc., Brokerage) over 10 years ago

I've done it many times, but always limit the time to three weeks.  I tell them if these people have any real interest in the property they will certainly go to contract within three weeks, if not they never had any intention of buying.

Posted by Geri Sonkin, Long Island Real Estate & Staging Expert (Douglas Elliman Real Estate 516-457-7103) over 10 years ago

Jennifer,

I would put an expriration to the exclusion. For example, two weeks. All the efforts could down the drain if it drags out.

Jerry Gray CRB,CRS  /Prudential Carolinas Realty in Winston Salem, NC

Posted by Jerry Gray, Serving the Triad Since 1980 (Wilkinson ERA Real Estate) over 10 years ago

Great blog and discussion! I just want to address Virginia's concern about if an excluded buyer has an agent present an offer. When a buyer is excluded from a listing agreement then it is up to the seller to notify the buyer and let them know that they are excluded and if they wish to work with an agent then the buyer will be responsible for the commission. If the seller fails to do this then the buyer may still be responsible for their agent's commission as this is addressed in the buyer agency agreement(check your state forms). In TN our buyer agency agreements have a place to list excluded properties for buyers so it works both ways. To be on the safe side, I would check your local MLS board to see what their guidelines are for listing in the MLS. If nothing else a short note to agents in the MLS comments may suffice such as "coop commission subject to buyer exclusion, contact LA before submitting offers." This way you know before you get an offer if this is from an excluded buyer and there's no surprises for the buyer's agent.

Posted by Kristy Baker (Century 21 Act III Realty) over 10 years ago

I have a seller w/ an exclusion right now (my first one). I didn't put any time frame on the exclusion, we'll see how that plays out. All I know is that since the listing date a few weeks back, this person's name hasn't been mentioned once. I'm guessing it won't happen...

Thanks for everyone's insight!

Posted by Chad Boyers (The Danberry Co.- Toledo, Perrysburg, Sylvania, & NW OH) over 10 years ago

I have done several exclusions in the past, but I have never thought to use a time frame.  I will be using one now.  This is why I play in the rain!

Posted by Ryan Gorman (Campo Realty) over 10 years ago

Jennifer, you asked about the comments that mentioned putting pressure on the potential buyer by giving them a time limit and you wondered how that had any impact.  What I found in the few instances where I was asked to do an exclusion was the seller was giving a special lower price to the potential buyer because of the fact that no commission was going to be due, once the exclusion is past, that buyer would have to up the offer to cover those added seller expenses.

Posted by Beth Anderson, Realtor - Tecumseh / Lenawee County (Goedert Real Estate) over 10 years ago

We regularly see this, and routinely add the exclusions to the listing. We will put a 30 day deadline on the exclusion.

Posted by Tim Bradley, Commercial Real Estate Expert in Jackson Hole, WY (Contour Investment Properties) over 10 years ago

You're right Jennifer. Chances are that this person won't buy the house.  It is irritating though as you want to begin the selling process with a clean slate.  I guess it's one of those where it's not worth the fight and best to get the listing.  Thanks for the post.

Posted by Olga Diaz-Potter over 10 years ago

I have put in an exclusion for 30 days too for a potential buyer - however once a seller told me he wanted a chiropractor written in as an exlusion but didn't know his name - gave the "no name chiropractor" 30 days exclusion!

Posted by Roshan Quigley (Weichert Realtors - Manalapan/Marlboro, NJ) over 10 years ago

Jennifer, I agree 110%... take the listing and get to work finding a buyer before the 'other guy' even has a chance to cut you out of the deal.

Posted by Ryan Hukill - Edmond, Realtor, Team Lead (ShowMeOKC Real Estate Pros of KW Elite) over 10 years ago

Jennifer,

I always tell the seller I will be glad to give the party an exclusion, but I can only give them the exclusion for 2 weeks.  I tell them a lot of times people will tell owners they might be interested in their property because they feel uncomfortable telling them they are not interested in it.  I then instruct them to call the exclusions as soon as I leave to let them know about the time constraint.  If they are interested, they will move on it.

We have to indicate on our MLS if there are exclusions on the listing.  By getting them out of the way in the first 2 weeks, it prevents the owner from calling them up after you have spent a lot of time and money marketing their property and offering it to the exclusion for less than your current offer.  

Posted by Earleene Woods, ASP, CRS, GRI (Keller Williams Experience Realty) over 10 years ago

Your right, get the home on the market & exclude the person for 10 days. You have a better chance with a lottery ticket then the seller has with that buyer purchasing his home. How many times have FSBO's thought someone was going to put an offer in on their home and nothing happens. He just wants to be sure that tire kicker is excluded. Makes the seller feel better and you've got your listing! Win-win.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) over 10 years ago

I agree with you 100% Jennifer.  Save energy for other stuff.

Posted by Mike Henderson, HUD Home Hub - 303-949-5848 (Your complete source for buying HUD homes) over 10 years ago

Wow..it just slapped me in the forehead..if the excluded party drags in another agent then they have betrayed the trust given to them by the seller.. So...write the offer Mr or Mrs Buyers agent..and I will take my listing side..Thanks..and every one have a nice day! 

Posted by Jim Palmer, Washington County, Florida (Chipola Realty - Chipley Office (850) 638-2777) over 10 years ago

Just found this.  Thank you Jennifer.  I just recently took a listing where I had the same exact thing happen.  I wrote in the exclusion and took listing.  My manager felt I shouldn't have done it, so I was glad to read your point of view on it.  Thank you.

Posted by Michelle L. Mayo, Shoreline Homes Girl (RE/MAX on the Bay) over 9 years ago

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