Let’s first delve into how exclusive listing contracts work here in Ecuador before getting into why we tend to avoid them. Exclusive listing contracts are generally valid for either six months or one year. They require the seller to pay the agency a commission if the property sells anytime during the term of the contract whether or not the agency finds the buyer or the seller does. The contracts require a 3% commission except in the case of large commercial properties or condominium buildings where the agency will get a commission on any units sold for the duration of the contract. In those cases commissions paid by the seller can sometimes get as low as 1.5%. In addition to the commission sellers must pay between $90.00 and $180.00, depending on the agency, upon signing the agreement. This price covers the cost of putting up the for sale sign and advertising the property in the newspaper. The agency puts its name and phone number on the ads in the paper and may also list the property on their website. This type of contract is used by the two largest Ecuadorian real estate agencies that operate in the Cuenca area as well as a few smaller agencies.

Nothing is wrong with exclusive listings per se; in fact if done properly they are ideal for sellers, buyers, and real estate agencies. In Cuenca however, the reality of exclusive listings is far from the theoretical ideal. For one thing, in a hot market like we are in, the owner of a quality property does not need to list with a realtor in order to sell it as long as it’s being offered at a good price. The majority of exclusive listings in and around Cuenca are for places that are not really very desirable or that don’t have the best prices. Since exclusively listed properties never show up on any MLS type of website and pertain only to the agency that listed them, they cannot be sold by other realtors. For those reasons most properties under excusive listing contracts are not sold by the listing agency but rather the owner and often after the term is up. Generally it takes longer for an exclusively listed property to sell than a property that’s on the open market. The majority of the time that exclusively-listed properties are sold before the listing contract expires it’s the owner who ends up finding the buyer. In the case where an owner finds his own buyer, rarely will the agency enforce the contract and collect their commission. In the best case scenario exclusively listed properties promote the listing agency by having their company signs up all over town and their name printed dozens of times in the paper at the expense of the sellers. Its often just a marketing or “notch in the belt” type of thing but in the worst case scenario, as is true of one agency, they just go around getting listings for the listing fees, slap the property in the paper for a bit, and that’s about it. When someone can get paid just for getting listings, it makes sense that they’d be less concerned about whether or not the property is priced to sell because they make money no matter what! We don’t charge to list properties which is one of the reasons why we have access to the best listings. The owners have nothing to lose by listing with us and everything to gain. Additionally we don’t list overpriced properties because we make nothing as a result of just getting a listing. Therefore for our clients, be they buyers or sellers, our way of doing things is far superior. Many wonderful properties are not listed by realtors who work with exclusive listings because the owners were not willing to sign an exclusive contract.

It’s certainly understandable why some agencies insist on exclusive listings. Having sellers pay you to put miniature billboards up with your company name on them all throughout the city is a very tempting proposition. Besides it’s difficult to see a property sold by another realtor when you’re the one who first put the listing on the map and you know that it’s going to be very hard to replace. There is a realtor that only sells to Gringos who will often lie to clients, claiming to have an exclusive listing contract for a given property. The mature way to deal with things is to realize that just because you get a property first does not mean that it’s only you’re listing. When we lose an excellent listing due to it being purchased either through us or someone else then we go back out and pound the pavement until we eventually find one to replace it. That is just one of the realities those of us who work in the industry must face if we want to be able to provide the best properties to our clients.

Shared listings can cause confusion. Often somebody sees the same property on two different websites and each website will have different information on it. That is usually due to the fact that not all realtors provide you accurate data. Some exaggerate and others just don’t have the facts to begin with. Some just take out a scratch pad and start scribbling down a few notes as the owner rattles on about the place. Very few actually inspect the property, form in hand, to verify what was said and record all the details correctly. Few realtors have a specific list of qualifications to determine if a property should even be for sale. Most agents don’t even look for problems nor do any kind of inspection whatsoever. Some agencies take longer than others to update prices on their websites but other details about a property, such as its size for example, simply do not change.