A One Time Showing Agreement is a commission agreement signed between a broker representing a buyer and a home owner.
The broker specifies the name(s) of one or more buyer clients she or he would like to show the apartment to. If the property is sold to any of the named buyers in the One Time Showing Agreement, the seller agrees to pay the broker the commission specified in the agreement.
A One Time Showing Agreement is used when a property is not listed in the MLS (Multiple Listing Service). Properties in the MLS have a contractual ‘co-broke’ commission which is offered to buyer’s agents who are members of the MLS. This means that no separate commission agreement is typically required when showing a home which is listed in the MLS.
A One Time Showing Agreement is necessary for a buyer’s agent when a listing is not in the Multiple Listing Service (MLS). The agreement itself provides a buyer’s agent with contractual assurance and protection of being paid a commission in the instance that the broker’s buyer decides to purchase the property.
Properties which are not in the MLS are most commonly FSBO listings, as these sellers do not have a listing agent who is able to upload the property into the MLS. Many FSBO sellers are in-fact amenable to paying a buyer’s agent commission. But without access to the MLS, the vast majority of buyer’s agents do not see such listings.
If a buyer’s agent happens to notice a FSBO listing, the agent has no motivation to show the home to a prospective buyer since the same contractual commission protection which exists for MLS listed homes does not exist in the case of a FSBO listing. Simply put, a buyer’s agent who shows a FSBO listing without a One Time Showing Agreement runs the risk of not being paid a commission.
While a FSBO seller can easily solve this problem and list on the MLS through an Assisted FSBO listing, many seller are simply unaware that such an option exists which would allow them to cooperate more seamlessly with buyer’s agents.
A One Time Showing Agreement provides a buyer’s agent with contractual certainty of being paid a commission if they procure a buyer. The use of a One Time Showing Agreement is not necessary when a property is listed in the MLS and the buyer’s broker is a member of that same MLS.
This because all MLS members typically sign a Universal Co-Brokerage Agreement which provides the same contractual guarantee of being paid a commission for bringing a buyer as would be established through the use of a One Time Showing Agreement.
Because other sellers all pay both sides of the broker commission. And as satisfying as it is to go against the herd, you simply cannot expect to sell your home if you believe that the buyer should pay commission.
If you take a count of the total number of listings on any given day on any of the major real estate search engines, you’ll find that less than 4% are listed as for sale by owner in NYC.
That means almost all inventory in the city is listed by an agent offering to contractually co-broke 50% of the total commission paid by the seller with buyer’s agents.
The co-broke is clearly and contractually listed in the local MLS (known as the RLS in NYC) shared listings database.
And since over 90% of home buyers work through an agent, why on earth would those buyers’ agents risk showing a FSBO property versus almost any other listing where their commission isn’t in question?
Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.