Sellers have two options when listing their home for sale through a real estate brokerage. They can either sign a Multiple Listing Service (MLS) agreement or an exclusive one.
In signing a MLS listing agreement, your property will be posted to and marketed on MLS — a private database that allows Toronto’s more than 50,000 licensed Realtors to see one another’s listings with the goal of connecting homebuyers to sellers. Most properties are advertised on MLS and sold with the help of two agents, one representing the seller and the other representing the buyer, known as the cooperating brokerage.
An exclusive listing is when you enter into a legal contract with a brokerage but your home does not appear on MLS. Under this agreement, only your agent and anyone that works at their brokerage is authorized to find a buyer for your home.
From a marketing perspective, a MLS listing is more advantageous as it increases the visibility of your property. Once inputted on MLS, it’s also showcased on Realtor.ca. Operated by the Canadian Real Estate Association, Realtor.ca is the most widely used real estate website in the country with more than 240 million visits each year.
A MLS listing also helps ensure you’re receiving the true market value for your property. Market value is determined when a home has been marketed and exposed to as many potential buyers as possible for a reasonable amount of time. An exclusive listing restricts showing access to people represented by the seller’s brokerage, thereby limiting the pool of prospective buyers.
However, there are times when listing a home exclusively makes sense. Instances include when a seller wants more control over who sees their home or a greater level of privacy. Fees associated with an exclusive listing may also be lower as there’s a better chance the buyer and seller will be represented by the same person. The listing agent stands to pocket the whole commission not just half and may reduce their rate as a result. (With an MLS listing, the commission is typically split between the listing and cooperating brokerages, unless the seller’s agent double ends the deal.)