Updated on June 16, 2025

If you are preparing to sell real estate in California, understanding the difference between these two common types of listing agreements is more than just smart—it could directly affect your bottom line, your control over the sale, and even whether or not you’ll owe a commission at all. Let us explore what these agreements mean, how they are used in practice, and what to keep in mind if you are navigating a real estate transaction—or facing a legal issue stemming from one.

When our hypothetical character Jane decided to sell her charming bungalow in Pasadena, she signed a listing agreement with a local real estate agent, confident that she was making the right move. A few weeks later, her neighbor mentioned she might have left money on the table by signing an “Exclusive Right to Sell” agreement instead of an “Exclusive Agency” contract. Confused, Jane began to wonder: did she just give away more control than she needed to?

What Is the Exclusive Right to Sell?

The Exclusive Right to Sell is the most commonly used listing agreement in California real estate transactions. When a homeowner signs this agreement, they grant the listing agent—and their brokerage—the exclusive right to market and sell the property within a specified timeframe.

Here’s the key takeaway: even if the seller finds a buyer themselves, the listing agent still earns the commission. That’s because they hold the exclusive right to negotiate and finalize the sale on the seller’s behalf.

This agreement is favored by agents because it guarantees compensation for their efforts. From open houses to paid marketing campaigns, agents are more likely to invest time and resources into promoting a property under an Exclusive Right to Sell contract.  This type of deal makes sure that the agent is compensated regardless of whether the buyer came through the agent’s efforts or not.

What Is the Exclusive Agency Agreement?

An Exclusive Agency Agreement, while still exclusive to one brokerage, allows a bit more wiggle room. Under this contract, the listing agent represents the seller—but if the seller themselves finds a buyer without any agent involvement, they don’t owe a commission.  In other words, this does not guarantee the broker/agent will get paid regardless of source—to get paid the sale must come by way of the agent.

At first glance, this may sound like a better deal for the seller. However, this agreement can discourage agents from putting in as much effort to market the property. After all, they risk doing all the work only to lose their commission if the seller makes a private deal on the side.

The Practical Differences Between Exclusive Right to Sell and Exclusive Agency

In California, both listing types are legally enforceable, but the Exclusive Right to Sell is far more prevalent—especially in residential real estate. It offers clarity, protects agent investments, and minimizes disputes over who “brought the buyer.”

On the other hand, Exclusive Agency agreements tend to be used in specific scenarios—such as For Sale by Owner (FSBO) situations where the seller wants to retain the right to market the property independently while still getting some professional support.

Exclusive Right to Sell & Exclusive Agency Pros and Cons: Choosing the Right Agreement

When it comes to the Exclusive Right to Sell, one of the biggest advantages is the level of commitment and motivation it inspires in your listing agent. Since the agent is guaranteed a commission regardless of who finds the buyer, they’re far more likely to go all in—hosting open houses, launching online campaigns, networking with other agents, staging the property and doing whatever it takes to get your property sold. The agreement also brings a welcome sense of clarity. With fewer grey areas, sellers typically face fewer commission disputes, and responsibilities are clearly defined from the outset.

But there’s a tradeoff. Even if you, the seller, find a buyer on your own—say, a friend or a neighbor who’s already expressed interest—you’ll still owe that commission. For some sellers, this loss of control can feel restrictive, especially when they believe they already have potential buyers in their personal network.

On the flip side, the Exclusive Agency agreement offers a bit more freedom. It gives sellers a chance to market the property themselves while still working with a licensed agent. And if you manage to bring in a buyer without your agent’s help, you can avoid paying a commission altogether—a tempting benefit for the savvy, do-it-yourself seller. This flexibility can be particularly appealing in unique situations, such as a hot market or a home that already has interested parties lined up.

However, this approach can also backfire. Because the agent’s commission isn’t guaranteed, they may be less inclined to invest heavily in marketing your home. There’s always the risk they’ll do the legwork only to be cut out of the deal at the last minute. That potential for reduced effort—and possible disputes over who “procured” the buyer—can introduce tension and confusion into what should be a smooth transaction.

When Legal Counsel May Be Needed

While these agreements are often straightforward, disputes can arise—especially if the seller believes the agent didn’t perform as expected, or if a buyer enters the picture through unclear means. Commission conflicts, miscommunications about contract terms, and disagreements about who introduced a buyer are not uncommon.

In California, real estate transactions carry high stakes—especially with the rising value of homes and the complex web of disclosures and obligations involved. Whether you’re a seller wanting to protect your interests or a buyer facing confusion about contract terms, having experienced legal guidance can provide peace of mind—or much-needed representation in a dispute.

How to Sell Smart and Stay Protected:

Choosing the right listing agreement isn’t just a matter of checking boxes—it’s about understanding how your decision affects the sale process, your control over negotiations, and the potential for legal issues down the road.

If you’re preparing to sell and aren’t sure which agreement is right for your needs—or if you’re already in a dispute over commissions or contractual terms—consulting a real estate attorney may be the wisest move you make.

At Schorr Law, we help California homeowners and buyers navigate real estate transactions with clarity and confidence. Whether you need guidance before listing your property or legal representation after a transaction has gone wrong, we’re here to protect your investment every step of the way. Contact us today to schedule a consultation with one of our top-rated attorneys. Call (310) 954-1877 or reach us through our contact form here.

Frequently Asked Questions (FAQ)

1. What’s the main difference between Exclusive Right to Sell and Exclusive Agency agreements?
The key difference lies in commission entitlement. With an Exclusive Right to Sell agreement, the listing agent earns a commission no matter who sells the property—even if the seller finds the buyer. In contrast, with an Exclusive Agency agreement, the seller can avoid paying a commission if they find the buyer themselves, without any help from the agent.

2. Why do most real estate agents in California prefer the Exclusive Right to Sell?
Agents typically prefer this agreement because it offers guaranteed compensation if the home sells during the listing period. This assurance motivates them to invest more time and resources in marketing the property, knowing they won’t lose out on commission if a buyer comes from another source.

3. Can I switch from an Exclusive Agency to an Exclusive Right to Sell agreement midway?
In most cases, you can switch—but only if both parties agree. You’ll need to amend the existing contract or sign a new listing agreement altogether. It’s always best to consult with your agent and, if needed, a real estate attorney to ensure everything is properly documented and enforceable.  Many of these contracts have a certain length of time before they expire.  At the end of a listing period, you may have a greater ability to negotiate.

4. What happens if there’s a dispute over who found the buyer?
Disputes over who “procured” the buyer can get messy—especially under Exclusive Agency agreements. If a deal closes and both you and your agent claim credit for finding the buyer, you may end up in a legal battle over whether commission is owed. This is one reason why many sellers choose the Exclusive Right to Sell agreement, as it offers more clarity.

5. Is it ever a good idea to use an Exclusive Agency agreement in California?
Yes, in certain situations. If you have a strong network or know someone already interested in buying your property, and you’re confident in your marketing abilities, an Exclusive Agency agreement can save you on commission. It can also work well for experienced investors or FSBO (For Sale by Owner) sellers who still want limited agent support.

6. What if I accidentally sign the wrong type of agreement?
Mistakes happen. If you sign an agreement without fully understanding its terms, you may be able to renegotiate or cancel it—but it depends on the wording and duration of the contract. Always review the agreement carefully before signing and consider having a real estate attorney go over the terms to ensure your rights are protected.

7. Are there other types of listing agreements I should know about?
Yes, there are a few others, such as Open Listings and Net Listings, though these are less common and carry their own legal and ethical risks. Open listings allow multiple agents to market your property, and only the one who brings the buyer gets paid. Net listings, which are discouraged in many areas, involve the agent keeping any amount over a set sale price. These alternatives are rarely used in standard residential real estate deals in California.

8. Can a listing agreement be canceled if the relationship with the agent goes sour?
In some cases, yes. Many listing agreements include cancellation clauses, but canceling early may require mutual consent or involve cancellation fees. If you feel the agent isn’t fulfilling their duties or there’s a breach of contract, it’s wise to consult a real estate attorney to explore your options.