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An exclusive authority

When appointing a real estate agent to sell a home, a vendor has a choice of two authorities: the exclusive and the general. The authority is the legal contract between the vendor and the agent.

The overwhelming majority of vendors sign an exclusive authority for a set amount of time with one real estate agent. Under the terms of the exclusive authority, if the home sells, the agent is entitled to be paid a commission on the terms recorded in the authority.

I f a vendor wishes to appoint more than one agent, it is not uncommon to sign a general authority. In that circumstance, the commission is paid to the agent who sells the home, or is the effective cause of its sale.

It may seem attractive to have more than one agent working for you but it can also be unclear to buyers who the selling agent is; determining who sold the property and is, therefore, entitled to the commission may also prove difficult.

If a vendor wants to appoint more than one agent on an exclusive basis, the appropriate way of doing so is to appoint both in conjunction, using a single exclusive authority., Sometimes a vendor will appoint an agent on an exclusive authority and then appoint another also on exclusive authority, while the first authority is still in existence.

If a vendor does this, the risk is that if the property is sold, they will have to pay two commissions, one to each agent. A vendor who signs more than one exclusive authority then attempts to avoid paying commission to one of the agents is likely to face legal action for breach of contract.
Given these risks, it is clear why the majority of vendors choose to hire one agent for a fixed period using an exclusive authority.



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