Last Updated on March 25, 2024

What Does ‘Seller’s Rights Reserved’ Mean? | Real Estate Definition

By Alan F Macdonald

What Does ‘Seller’s Rights Reserved’ Mean?

‘Sellers rights reserved’ is an agreement between a listing agent and a home seller that allows the seller to try to sell their home on their own to avoid paying a commission to the agent while the agent has the home listed. If the listing agent brings a buyer (or finds an agent who has a buyer), the listing agent gets paid a commission. If the seller finds their own buyer, the agent is not paid. ‘Seller’s rights reserved’ clauses are similar to what is called an ‘exclusion’ on a listing contract.

Real Estate Agent Explains ‘Seller’s Rights Reserved’

‘Seller’s rights reserved’ is not a very common occurrence. One of the reasons for this is that is can be difficult to prove what action actually brought a buyer to a property.

Some examples:

  1. A home is listed on MLS and a buyer sees the home online through that advertisement, then the agent has brought the buyer.
  2. A buyer learns about a home through MLS, drives to the home, knocks on the door and engages the seller in a conversation about buying the home, it would appear that the seller found the buyer themselves. In reality, the reason the buyer knew the home was for sale in the first place was because of the agent’s advertising on MLS. Agent may be entitled to a commission in this case.
  3. A seller talks her friend into coming to see the home. Since her friend has not been looking at properties, she hasn’t seen any advertising from the agent. This is the seller’s work, not the agent’s.
  4. A seller puts a ‘for sale’ sign on the back fence and one at the end of the back alley. A person driving down the alleyway sees this sign and approaches the seller. This is the seller’s buyer.

Considering the complicated nature of reserving seller’s rights, it may be more reasonable to have a seller try to sell their own property for a period of time before listing the home exclusively with a real estate agent. If the home does not sell through the efforts of the seller, then they might want to hire a realtor. If it does sell, then there is no confusion about who actually sold the property.

Why Does It Matter?

Whether a seller needs to pay a commission for the sale of their home is significant. And whether a real estate agent wants to sign a contract with a ‘seller’s rights reserved’ clause can make for a complicated selling process. It would be prudent to keep a list of who brought which potential buyer to view the property and how so that there is no confusion when it is time to negotiate an offer. It is very important that both parties be transparent in this relationship or there could be legal ramifications.

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