Listing Ownership: Whose Grass Is It Anyways?

"Who owns the listing?" appears to be a never-ending debate in real estate, despite a recent court case that certified the broker owns the listing and the MLS can protect it. Somehow there remains this belief among some incredibly intelligent people in the industry that real estate agents do the work, so they own the listing content.

They do not. This has never been the case, and unless an agent becomes a broker/owner, it never will be. A listing was, is and will be owned by the broker/owner and not the agent.

Whose grass is it?

Think about your grass. You hire a landscaper to come and cut your grass. The landscaper takes care of your grass. He weeds your grass, he waters your grass, he fertilizes your grass, and then he cuts your grass and hauls away the clippings. Your landscaper does 100% of the maintenance and care of your grass.

Real estate agents do exactly the same thing. Instead of grass, they cultivate ongoing relationships with clients that they often brought to the brokerage (watering, fertilizing and weeding) and secure the listing of these clients and close these deals (cutting the grass and hauling away the clippings).

Both the landscaper and the real estate agent are independent contractors. But does anyone ever say that the landscaper owns the grass? The real estate agent may have done 100% of the care and feeding of their clients, but they do not own the listing that this relationship produces.

The broker owns the grass

Just like a landscaper can't come in one day and start cutting your lawn into sections, dig it up and sell your lawn as sod to someone else, an agent can't "take their listings with them" if they jump ship to another brokerage.

A real estate listing is not transportable by an agent. An agent can't transfer a listing from one brokerage to another without the listing broker's permission. Otherwise, the listing remains with the originating brokerage, because the agent is an independent contractor (or an employee, in some rare cases) and that work product is the brokerages, not the agents.

Agents: It's a good thing it's not your grass

The landscaper is pretty happy with the fact that they don't own the grass, because if someone slips and falls on that wet grass and sues, he or she is going to sue the homeowner and not the landscaper who made the lawn wet.

Agents should be equally delighted that they do not own their own listings, because if they did, they would also be liable for everything tied to that listing. When someone sues, the broker is the one with the liability – and the insurance – that covers the brokerage and their agents. This is a vital point, because you can't have it both ways: Agents can't "own the listing" and not the liability that comes with it. Broker/owners both own the listing and take the risk for the liability, and pay the big bucks for the insurance coverage.

One multimillion-dollar lawsuit would likely dissipate an agent wanting to claim they own the listing: Take my listing, please, the agent would tell their broker.

Take my grass, please

It's remarkable that the listing ownership debate continues, despite such clear delineation of the roles of a broker/owners and the real estate agents who work them.

One other debate about listing ownership centers on the fact that the consumer really "owns" the listing, as after all, they own the grass.

Yet once again, it comes back to the issue of liability and why consumers hire real estate professionals in the first place: They need a professional who can successfully navigate the complex and legalistic issues that permeate a real estate transaction. The fact is a seller certainly doesn't want to be responsible for a lawsuit if they are sued.

That's why most consumers hire a real estate pro: They want someone else selling their grass and have no problem giving a broker the ownership of their listing.

The bottom line for agents: Just because you take care of the lawn, it's not your grass.

To view the original article, visit the WAV Group blog.