The Hidden Risks of Open Listings: How Savvy Buyers Exploit the System

Open listings are a common practice in real estate markets worldwide, but for property sellers, this approach often introduces more risks than benefits. By allowing multiple agents to represent the same property, open listings inadvertently create opportunities for buyers to manipulate the system—often at the seller's expense.

In an open listing, buyers can shop around between agents, leveraging competition to secure a lower price. Here’s a real-world scenario that highlights how this can happen:

Example: Property Listed at €500,000 (Represented by 3 Agencies)

1. Buyer contacts Agency A and asks if the seller would accept €450,000. Agency A responds, “The seller might, but let’s set up a visit.”

2. Buyer contacts Agency B and says, “Another agent told me €450,000 might work. What do you think?” Agency B replies, “The seller might accept €460,000, but that’s about it.”

3. Buyer contacts Agency C, saying, “I’ve heard the seller will accept between €450,000 and €460,000. What’s your take?” Agency C replies, “That sounds about right. Let’s get you in to see the property.”

The buyer visits the property with Agency C and submits a €450,000 offer after the visit.

What Happens Next

After the offer is made, Agency A and Agency B, eager to stay in the loop, contact the seller:

- Agency A informs the seller, “We have a buyer considering €450,000, but no formal offer yet.”

- Agency B states, “We have a buyer who might offer €460,000, though nothing is official.”

Meanwhile, Agency C submits the actual offer of €450,000.

Now the seller faces conflicting input:

- Agency A suggests €450,000 is likely.

- Agency B hints at €460,000 as a possibility.

- Agency C pushes the €450,000 offer as the only serious option.

With no clear strategy or single point of communication, the seller, feeling pressured, accepts the €450,000 offer—€50,000 less than the asking price.

Why Sellers Lose in Open Listings

1. Lack of Unified Strategy: Multiple agents create confusion, leaving sellers vulnerable to pressure.

2. Competition Lowers Price: Buyers take advantage of agent competition, which can drive down the property’s perceived value.

3. Agents Prioritize Closing Deals: To secure the buyer, agents may prioritize speed over achieving the best price for the seller.

How Sellers Can Protect Themselves

The solution? Exclusivity. By working with a single agent under an exclusive listing agreement, sellers maintain control of their property’s pricing and strategy. This approach ensures consistent communication and prevents buyers from exploiting competition between agents.

In the end, an exclusive agent acts as a trusted partner, focused solely on maximizing the property’s value and securing the best deal possible for the seller.