Open Listings vs Exclusive Listings: An Eye-opener for Unsuspecting Homeowners Selling their Homes in Ghana:
If you look up the definition of an Open Listing in any real estate textbook, it is going to read something like this: An open listing in real estate practice is a listing given to any number of real estate brokers without liability to compensate any of them except the one who first secures a buyer who is ready, willing, and able to meet the terms of the listing or secures the seller's acceptance of another offer. The sale of the property automatically terminates all open listings.
Again, if you look up the textbook definition of An Exclusive Right to Sell Listing in real estate practice, it will read something like this:
It is an employment contract giving the broker the right to collect commission if the property is sold by anyone, including the owner, during the term of the listing agreement. For example: Kojo gives Kokofu Realty an Exclusive Right to Sell Listing on his house. If the house is sold during the time of the listing, Kokofu Realty is entitled to a commission. If another broker from Dzalele Realty procured the buyer who consummated the sale, Kokofu Realty is still entitled to the commission but could enter into agreement with Dzalele Realty to split the commission.
There is a third form of listing which gives homeowners the right to sell the property themselves without paying the agent a commission. It is called an Exclusive Agency Listing and it is an employment contract giving only one Brokerage Firm for a specified time, the right to sell the property and also allowing the owner alone to sell the property without paying a commission.
For example, if Kwabena gives Abena Realty an exclusive agency listing on her house and an agent of Abena Realty or any other brokerage firm sells the house during the time of the listing, Abena Realty is entitled to the commission (which they could agree to split with the other brokerage firm). If Kwabena sells the house himself, no commission is earned.
The normal real estate practice in the developed world is for real estate agents to form an association that enables them to cooperate with each other in the selling process by pooling all their listings together into one market place called a Multiple Listing Service (MLS). It is an association of real estate Brokers that agrees to share Listings with one another. The Listing Broker and the Selling Broker share the commission. The MLS usually furnishes its members with a book containing all the listings or publishes them online, updating the book or online data frequently. Prospective buyers benefit from the ability to select from among many homes from any member broker.
For example, Kofi and Ama, both brokers, are members of the Multiple Listing Service. A home that was listed by Kofi under an Exclusive Right to Sell Listing is sold by Ama. The two brokers share the commission. The sharing may be 50/50 or some other split as indicated in the listing.
I have recently had the rude awakening of finding out that these very basic rules of real estate practice have been turned upside down here in Ghana. Some unscrupulous real estate agents here are busy making their own rules on the fly, and unsuspecting homeowners are virtually at their mercy. It feels like the wild, wild, West during the gold rush in California in 1849 when 300,000 men, women and children descended onto California by sea and land in search of gold! Indeed, I personally had the unique experience the other day of an agent asking me to pay him money upfront before he would show me a piece of land that I had wanted to preview first before showing to my buyer. I could not believe it. I thought he was dreaming! I told him “Thank you, Sir!” and walked away from him.
Then I had another lady who had taken an Exclusive Right to Sell Listing in a gated community in East Legon, who would not split her commission with any selling agent, and was rather requesting potential selling agents to collect their commission from their buyers because she was entitled to all the commission from the seller! Wrong, wrong, wrong!!!
It is obvious that agents here know that most homeowners in Ghana are not aware of the rules of real estate practice and would therefore accept whatever any agent tells them. Ghanaians by nature don't build their homes to sell. They build them to remain in the family to pass on from generation to generation. This whole idea of selling their homes is a novelty to most Ghanaians and real estate agents here are confusing homeowners with some unsophisticated, crude and shameless methods of real estate practice around here. My advice to homeowners here who want to sell their homes is to read very carefully the terms of the Listing Agreement they are signing and make sure they are not boxed in and taken advantage of by any agent.
Currently, there is no Multiple Listing Service in Ghana. So agents in Ghana do not have a pool of real estate data or list of homes for sale in one place to choose from. It is all a fragmented bunch. Their saving grace is the Ghanaweb web site where agents pay a ton of money to advertise their listings. Why on God's earth real estate agents in Ghana would not form an association and build a Multiple Listing Service which would be very beneficial to all of them collectively, only they know!
Our country is part of the comity of nations on this planet and professionals in every field of human endeavor must practice their craft according to international standards, real estate agents not excepted. It is time real estate agents in Ghana stop ghettoizing this proud and decent industry.
Someone better organize some real estate seminars around here on real estate practice and educate agents carefully before the situation gets out of hand!
Peter Atsu Tsikata
Real Estate Consultant
Millennium Properties Ghana Ltd
Email: [email protected]
Web site: www.millenniumtoday.com
Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not neccessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article."