Open Listing vs Exclusive Listing in Costa Rica

You may have heard from people in Costa Rica that when trying to sell your property you should only do ‘Open Listings’. An Open Listing is one where you hire a real estate agent or real estate office to help you sell your property, but you still reserve the right to sell it yourself or list it with many different real estate companies and see who sells it first. You would only pay the agent or office that sells the property, or would pay no one if you sold it yourself. The major problem with this strategy is that it does not encourage the sharing of properties between agents.

When I get an Open Listing, I place it on my real estate webpage and hope that I get someone that calls me directly on that property. If another agent from a different company were to call me and ask me if I knew of any properties that match what their client is looking for, I will only mention the ones that are Exclusive Listings… Why? Because if I mention to that agent that I have a property for sale and that agent catches wind that it’s an “Open Listing”, this agent will probably cut me out of the transaction and go to the seller directly. So, that is the reason real estate agents in Costa Rica don’t share Open Listings with other agents.

In the past, an Open Listing was your best option, as we did not have a database of properties to share. But now things have changed in Costa Rica, with new tools being brought to the market by the Costa Rican real estate boards. These tools are not new, and they have been used in other countries for decades. One of the best tools that I have used in my 22-year real estate career was the MLS system in the United States. The MLS system, or Multiple Listing System, is a database where agents can place their Exclusive Listings and share them with other agents that may have a buyer for the property being advertised. Costa Rica now has an actual MLS system called OMNI MLS. This system allows me to upload properties and share them with other agents all over the country and the world. Agents all over Latin America use the OMNI MLS system, so they can collaborate with us to sell your property.

When I place a property on the MLS here in Pavones Costa Rica, all Costa Rican agents that are part of the OMNI MLS will have access to the listing information, including the description, the surveys, the photos and even the videos. Not all agents are members of the real estate Board though, and you need to ask yourself, “Why?” The Board make sure that your agent is an honest person. They conduct background checks, want letters of recommendation, require a minimum of a high school degree, as well as other requirements, just to allow a real estate agent access to the OMNI MLS. They also provide resources in teaching agents the laws of this country. This ensures that your agent is of higher quality than most.

In my professional opinion, an Exclusive Listing will always give you a higher chance of selling your property, faster and for the most money, since it gets put into a database where thousands of agents have access to it, not just one or a few. Another cool feature of Exclusive Listings that get placed on the MLS is called IDX, or Internet Data Exchange, which allows all the agents to place these properties directly onto their websites. The MLS even helps us with international marketing through listing syndication, which is when properties get automatically sent to other top international websites, like Realtor.Com/International. Also, if you picked a top agent, like myself or my partner, you will get the same high-quality professional photos and descriptions distributed throughout, putting forward a unified message.

Another important tool that we have now is called WASI, which is a CRM, or Customer Relationship Management system, that connects agents together. With one click on WASI, an agent can send me all their listings and receive all of mine. We also now have WhatsApp groups of realtors, where we share properties with each other… but not the Open Listings.

Yes, with an Exclusive Listing you will have to pay a commission to your agent, even if you find the buyer and sell the property. But that commission amount can be reduced or negotiated, you just have to ask. For example, if I charge a client 6% for an Exclusive Listing and that seller finds me the buyer, then I will handle the entire transaction and make sure that it closes. I will also reduce my fee to just 3%, since the seller helped me locate the buyer.

Let’s be real here… your goal is to sell your property. So if you end up having to pay an agent, it’s a good problem to have, as it means your property sold. Most agents, like myself, don’t charge anything unless the property sells. An Open Listing is inferior to an Exclusive Listing, as far as the marketing goes. So now I will leave you with a few “Pros and Cons” of each type of listing:

Pros of Open Listings

• List with multiple agents
• No commission to pay if you sell it yourself

Cons of Open Listings

• Different agents have different marketing skills, so your listing may look good with some agents and bad with others.
• Agents not coordinating with each other (Sometimes a price drop may not be communicated to all agents and different prices may be displayed)
• Agents will not share their listings with each other in fear of being cut out (commissions are not shared on Open Listings between agents)
• No international marketing, just the agent’s webpage

Pros of Exclusive Listings

• Listings are shared with all agents, much more exposure
• The marketing will be consistent throughout all the different webpages and platforms (So choose an agent with marketing skills and a drone!)
• International marketing through portals, like Realtor.com/International
• Sharing listings through WASI
• Sharing listings through agent WhatsApp groups
• Sharing listings through social media

Cons of Exclusive Listings

• If you hire a bad agent, they may not share the listing with others or on platforms like the MLS
• You will have to pay some commission, even if you sell it yourself
• If you hire an agent with poor marketing skills, that will be the content that gets distributed

So, as you can see, an Exclusive Listing with an experienced professional, like myself, is a much better marketing strategy than listing it with several agents as an Open Listing. Yes, it may sell as an Open or Exclusive Listing and in the end the commission amount that you pay will be about the same. Remember, commissions are 100% negotiable, and some agents charge less than others or may cut you a break if you get a lower offer than expected, just ask.

Written By: Eric Alejandro Chavarria Arce, Realty Pros Costa Rica