I agree with most of the comments, it's one of the avenues that sellers have if they don't want to list exclusively with a broker. You "might" save a few % but it can also take longer to sell but it's doable. In this market if a limited listing works for you then go for it. It's your call, you're the boss not these agents telling you that they only take exclusives and will not market a FSBO aka open listing or a limited listing. My answer is good for them, it's your property, your money you do what you think is right for you and your family. Aside from the % that you'll be paying out you really need to feel comfortable with the broker. It's hard to tell if they're looking out for your best interest or their own and you'd be surprised although no one will admit it. Do what you think is right, if you need assistance marketing it I’m here to help as well as most of us. Have a safe a & healthy holiday!!

James,

It's kosher:)) Basically it is similar to a FSBO who is working with a broker ( or multiple brokers ) on an open basis and promises to pay a commission to whoever brings the buyer. This is completely legitimate by any rules or standards of DOS or REBNY. By posting it as limited listing the broker basically offers to cooperate with other brokers who may have buyers for it and therefore help sell the listing and split the agreed upon commission. The broker is thus creating additional exposure for the seller by letting other brokers know about the listing. The fact that this type of listing does not make it into the MLS means that a large percentage of brokers will not obtain the listing at all. OLR will have ALL the exclusives from the MLS and then some - such as limited listings, or listings from certain small agencies at times , which in my opinion is one of many things which make OLR a superior system. Not all brokerages, and this includes some of the largest ones, are using it though.
So with such an arrangement , you are missing exposure. Also, if there is nothing in writing, (which can be the case with open and limited listings), even if brokers find the listing, it is considered risky for them to go there. Additionaly, seller will unfortunately be missing exposure if the commission is not what the agents are used to - such as 4% split bt two brokers instead of the most common 5-6%. The truth is that many buyers' agents will avoid the listing............There are numerous reasons why sellers do not want to list with one broker exclusively and an open listing or a limited listing is completely legit. Of course most brokers do not like this and some will even look down on it, as the standard of the industry is to represent an exclusive listing, be protected and have a guaranteed sale and commission. A seller who is serious and needs to sell, would definitely be best helped by going exclusive and giving the listing MAXIMUM EXPOSURE to ALL of the brokerage community. Keep in mind that with all the great promises of internet exposure, zillions of websites, syndication, flashy marketing, sale campaigns and what have you, most sales - around 90- 95%-still happen through the NYC MLS and with a buyer's broker involved. You are better off doing a 5% exclusive versus 4% limited any day. For the additional 1 % many more brokers see the listing, more buyers come and better your chance of getting offers or finding the right buyer who may be willing to pay more for your apartment. The link below to the sellers page may provide a bit more useful info. Best of luck

A "Limited Listing" is by REBNY definition a unsigned listing, the owner may have given it to only one or two agents to represent but did not sign anything, technically an open listing in some ways, it is similar to the term Ours Alone, REBNY does not allow "Ours Alones" or "Limited Listings" to be disseminated through the RLS system.
It is a New York State Law that Exclusives must be labeled as such in all advertising. And all agency advertising MUST state that it is an agency posting the ad. Preferably with the Name of the Brokerage.
I personally never put any kind of open listing on my web pages, you want me you must sign the exclusive.
Some Agencies in NYC will post anything on theoir sites and never take it down, most of us know which agencies those are. They do a disservice to our profession

James,

I'd like to clarify a few things and hope that you find my points helpful.

First, the term "Limited Listing" was created by the National Association of Realtors around 2001 to give title to the practice (and business model) of agents (or possibly entire firms, i.e. the now-defunct in the US: Foxtons) of offering sellers a menu of services from which to choose. Depending on the chosen services, a fee was then determined. It was this fee menu instead of the traditional commission percentage that was strikingly different. If a seller chose all of the services, the listing would not be a Limited Listing. If the seller chose only to submit the property to the MLS or local listing service, the listing would be limited. In short, anything less than the full services offered can be called limited. When originally named, the Limited Listing was simply submission to the MLS with no added marketing, advertising, negotiating assistance, or anything else. This arrangement morphed into anything less than full service. For many reasons, this arrangement is seen by many as less than optimal for the seller. While it is possible to reduce the costs to the seller, it may add expense in other, less tangible or obvious ways. It is the limited listing that statistics indicate stay on market longer and bring a lower sales price. However, it may be an option that works adequately for some.

I'd like to point out that the amount of the commission has absolutely nothing to do with the services the seller needs or those which the agent has promised to perform. By definition, a limited listing is one in which the seller is paying a flat fee (not percentage) to the agent for performing one single service or several services. The payment or incentive offered to the agent who brings the buyer is a different issue. The two should not be confused. Again, technically, the listing agent and the buyer's agent are not "splitting" the commission for a true limited listing. The listing agent gets a fee for service rendered and the seller is paying a commission to the buyer's agent.

My last point is directed more to the other agents who have answered your question and others inquiries on this site. But it may be helpful to you as a consumer. Kudos to Mitchell and Debbie for addressing the all too familiar, open discussion about commissions. Anti Trust Laws FORBID the open discussion of commission rates, even in the hypothetical. Numbers should never be given. It is this discussion, although oftentimes with no intent of malice, that gets agents and brokers in trouble with the Federal Trade Commission. All Commissions are Negotiable. Each agent runs his or her own business. We are all independent contractors. We each have the ability to charge what we see fit. If a company requires an agent to charge a particular commission rate, the company is in danger of several things: everything from collusion to IRS rules concerning employees versus independent contractors. I know what my services are worth and charge accordingly.

There are two sides to consider when negotiating commission, the services that you need your listing agent to provide as well as the listings with which you're competing (and the incentives they're offering). In some cases, you truly get what you pay for. But sometimes, you pay for what you get.

Personally, I'd stay away from the "open listing" because no one particular agent is working hard for you. Don't be persuaded to believe that the more agents you have involved, the more people are actually working for you. Many agents take open listings simply to get calls from buyers. Why should they work hard for you when there's little possibility of reward? IF they advertise your property, the chances of them selling your property to a buyer who calls because of an ad for your property are relatively low. More likely is the agent would like to keep your apartment available (un-sold) so that calls keep coming in. The agent has the potential to sell something else to that buyer...while he is still getting calls on yours. Pessimistic, I know. Realistic, unfortunately.

Good Luck and I'm sure you'll make the right decision. And, as always, feel free to contact me with any questions.

Regards,

John R. Wuertz
212-605-9377

James,

I can tell you another thing that's Kosher and please don't be surprised.

A FSBO is a FSBO because they don't see a point of paying a broker full 6%. Some owners offer 3% while others feel like 2% is good enough.
Two things happen. #1 Many brokers refuse to work with FSBO's because they know the entire transaction could get emotional, ego's come into play and lack of experience on the sellers side which can kill a deal.

Sellers seem to dismiss the fact that if only a "Buyers" broker is involved. He or she is doing ALL of the work. Negotiating with the seller and buyer, putting a board package together if it's a coop, scheduling everything, going back and forth with attorneys, etc... That broker now has to do double the work for half of the commission. I think 7% would be appropriate.

Anyway, let met me get to my second point.

I know of instances where that .5% of buyers who choose to work on their own thinking they will score a better deal. Look at a listing, they see it says FSBO in bold letters.......a huge smile comes over their faces and they automatically deduct 6% off your price, simply because you are not being represented. Here is the catch..........after 6% comes off, they start negotiating. I'm not saying every direct or indirect buyer does this, but I'm also not saying that it's not unheard of.

Btw....When it comes to Co-broking a listing that's 4%. Technically buyers broker gets his 3% while sellers broker keeps only 1%. I don't believe many firms would allow that.

Good luck James.

Mitchell - good point, and it's an issue many agents here on Trulia don't understand.

Someone on another thread here on Trulia asked what the average commission was in their area. I can't tell you how many agents jumped in stating what their "standard" or "usual" commissions were, using specific numbers. When I pointed out that this may be in violation of the anit-trust laws, one gentleman in particular took up a defensive postion insisting it was "ok" to answer the question, and discuss commissions openly.

In my opinion, the only "proper" response to any such question is...."all commissions are negotiable".

Oh well...........it's everyone's prerogative to type whatever they want, but I agree with you - in a public forum it's better to air on the side of caution!

So, James - you got some thorough answers to your "kosher" question.......when in doubt, you can always check with a rabbi! :) hah!!

Best wishes.......
Debbie Rose
Prudential NJ Properties

It is never "kosher" for real estate professionals to discuss pricing and/or commissions with other real estate licensees outside their own brokerage. It may be considered "collusion" and may violate state and federal anti-trust laws.

This is a new medium where comments and/or discussions are recorded and public.

Mitchell Hall, Associate Broker
The Corcoran Group
2253 Broadway
New York, NY 10024
917-312-0924
mhall@corcoran.com
http://nycblogestate.com

Kosher? Of course! Anything that is legal to do, and that serves the interests of the client and is fair and honest and good faith dealing with the customer--meaning disclosure, in most cases--is ethical.

In addition, most local brokers and agents, including me, belong to the Real Estate Board of New York (REBNY), which requires brokers to cooperate with each other for the benefit of clients and customers. I'm always delighted and eager to cooperate with other brokers to craft a good deal for all.

This kind of limited listing may occur when an agent/broker has a nonexclusive agreement with an owner/seller who is acting as their own agent (they are working For Sale By Owner, or FSBO).

The FSBO agrees in writing to pay the buyer's agent a percentage of the sales price if the agent produces a buyer who closes on the property. In addition, the FSBO authorizes the agent to advertise the property. Other agents could negotiate their own independent agreements with the same FSBO.

I like the term "limited listing" instead of "open listing" for these arrangements because it communicates the fact that there is an actual agreement in place between the FSBO and the buyer's agent/broker.

Note that this is quite similar to what happens with many new development condo sales. The developer essentially acts as its own agent and will pay any broker who produces a buyer a percentage of the sales price (I know of buildings paying 2% to 6%).

If big developers can have listings like this, why can't FSBOs?

When I enter into these agreements, I also explain to the FSBO that I will be acting as a buyer's broker. I never agree to act as a dual agent. I do not hold open houses for them, I do not negotiate on the FSBO's behalf. My fiduciary responsibility is to the buyer, and I disclose this to all in writing, using the NY State disclosure form (available from the New York State website).

Who actually writes the check for the broker's fee does NOT determine agency in New York State--strange but true! Look it up if you don't believe me ;)

Whether other brokers approve of limited listings, or fear it will reduce their income, is not something that concerns me. I legally represent my clients' interests to the best of my ability, and I deal honestly and fairly and in good faith with our customers.

Many brokers forget this, but by New York State law, broker commissions and most terms are completely negotiable. [There are rare exceptions, for example, the net listing, which is illegal in New York State.]

What is the downside for FSBO sellers?

Well, I know for a fact that at least a couple of the biggest real estate firms will refuse to lower their 6% commission for seller/owners, and their agents cannot accept less than 3% of the purchase price when there are two brokers involved.

This creates problems with the limited listing. If the agent has a limited listing agreement at 4%, and a broker shows up with a buyer, each brokerage would get 2% at closing. But if the agent works for a brokerage that insists upon 3%, then essentially they cannot work together. One way around this is to offer a 25% referral fee to the broker, but this may not be acceptable to the broker who has invested many hours with that buyer.

I think limited listings can be terrific for sellers who want to act as their own agents, but I think it's important that the downside be explained to them, so they can make a fully informed decision.

Karla Harby
Vice President
Licensed Real Estate Salesperson
Charles Rutenberg Realty, LLC
127 East 56th Street, 4th Floor
New York, NY 10022
(212) 688-1000 ext. 383
(917) 365-0876 cell and text messages
(212) 688-1919 fax
kharby@rutenbergrealtyny.com
http://www.rutenbergrealtyny.com/agent_details.aspx?agentid=51888

Dear James,

Joe has explained what limited listing very well. In any field of work, it is important and essential that the terms and conditions are transparrent to all parties involved.

If you feel that the commission amount is high. The commission amout can always be negotiated and you can set the number of months you want your agent to sell your home. If they cannot sell your property, once the listing period expires, you can re list with another agent. In todays market you will need an agent that is willing to go above rest to have you property advertised and marketed to the most amount of potential buyers. A broker is more inclined to market a property, if they know that they have a seller that is willing to pay them for their services.

Good luck. I would be happy to work with you to sell your property. If you have any questions, please give me a call.

Nirmala Caraballo
Real Estate Agent
Cruse Realty
Tel.: 646-479-7873
E-mail: nhcaraballo@yahoo.com

HI James,

That is actually just an open listing. You can go directly to the owner and skip the Broker altogether. also any broker can go to the owner and negotiate directly. A limited listingis a made up term by Real Estate Brokers. Is it kosher? Yes as long as everyone involved knows the ramifications of it.

Personally, in this market, I recommend that all sellers use a good broker to sell their home. Since you would not perform surgery upon yourself or try to fix your own roof (i.e. you would get someone who knows how to do these things) you should get a professional to sell your home and make them contractually obligated to do so. It is a flooded market and you will need an exclusive contract to get your home sold.


All the best,

JOE GREENE
Broker/Owner
WEICHERT, REALTORS - House & Home
609 Kappock Street
Suite 1A
Bronx, NY 10463
(718) 432-5000 ext.601 (Office)
(718) 432-2091 (Fax)
(917) 974-2600 (Cell)

joegreene@weichert.com