Real estate is a complex industry that involves a lot of legalities, deals, and contracts. As a professional, I have come across the term „bilateral contract“ several times when it comes to real estate listings. In this article, we will explore what a bilateral contract is and what type of listing is not considered one.
What is a Bilateral Contract?
A bilateral contract is a legal agreement between two parties where both parties are obligated to fulfill their part of the contract. In the context of real estate, a bilateral contract is a listing agreement between a broker and a seller. The seller agrees to list the property with the broker, and the broker agrees to market and sell the property on behalf of the seller.
The bilateral contract establishes the terms and conditions of the listing agreement, including the listing price, commissions, duration of the agreement, and any other relevant details.
What Type of Listing is not a Bilateral Contract?
While most real estate listings are bilateral contracts, there is one type of listing that is not considered bilateral. This type of listing is called an open listing.
An open listing is an agreement between a seller and multiple brokers. The seller agrees to list the property with multiple brokers, and the brokers compete to sell the property. The seller is only obligated to pay the broker who successfully sells the property.
In an open listing, there is no exclusive agreement between the seller and the broker. The seller can choose to work with multiple brokers, and the brokers are not obligated to market the property exclusively.
Bilateral contracts are common in the real estate industry, and they establish a legal agreement between a broker and a seller. However, open listings are not considered bilateral contracts because they allow sellers to work with multiple brokers. As a professional, it is important to understand the legal terms and concepts in the real estate industry to create accurate and informative content.