Free Advice on How to Prepare the Authority To Sell : EATS V.S NEATS

Selling our house is not really easy as some people may think. Well, I know because I have already personally sold several of my own.

First, is the sentimental value one attached to a property – having built it from scratch so to speak. Or, having raised a family in that house, or having develop friendships among the neighbors after many years – it is sometimes really hard to detach ourselves from that property.

Second, is the social stigma of one having to sell ones’ house. In this  materialistic world – to be perceived as having fallen on hard times is not acceptable to many. For this reason, some owners even forbids placing a for sale sign on their property – and wants to have the sale of their property done secretly until the very last moment.

Third, is the difficulty inherent in dealing with aggressive buyers, unprofessional (mostly fly-by-night or illegal) real estate salesmen,  government bureaucrats, usurious banks, and so on. Owners sometimes may just want to sit back and let the real estate broker go through all the hassles – for a modest fee, or commission (in our area, the real estate board agreed to charge a maximum of 5% of the gross selling cost for residential properties – and this broker strictly adheres to this policy – except in some instances  where it was mutually agreed with the seller).

Owners who wants to sell their property themselves are sometimes laboring under the mistaken illusion that their property is so hot – that buyers will practically go over themselves scrambling to make an offer to buy their property. This may be true in some cases – especially if the law of supply and demand says so – but nowadays, with the market awash with cheap properties, and with only a few serious buyers around – it is really a buyers’ market.

It is for these reasons (and there are many others, of course!) that it is best in my opinion to just hire the services of a real estate broker. You can of course negotiate a mutually acceptable fee, or commission with the broker for all his services, and effort to sell your property.

But in preparing the listing agreement, or the authority to sell – which is better, the exclusive authority to sell (EATS) or the Non-exclusive authority to sell (NEATS)?

In my opinion, it all depends on the market situation, and the circumstances of the seller. If the owner is ready, and have the time and gumption to weather all the hassles and difficulties mentioned above – then by all means he can do so. After all, the right to sell ones’ property is inherent in the so-called bundle of rights of our Constitution.

FSBO (for sale by owner) is much like that of the action of a weekend warrior, or a DIY renovator – why should one hire the services of a carpenter, when you are reasonably handy with a hammer or a saw  yourself? Some would even say that it’s good work – free exercise thrown in. I dare say, just be sure not to hit your fingers with the hammer, huh? Ditto with real estate brokerage. 🙂

But back to the original question: Which is better the EATS v.s. NEATS? Well, let’s tabulate the pros and cons. Mind you, this is my personal viewpoint – as a real estate broker:

Non-Exclusive Authority To Sell


1. It allows you, or your relatives, to sell the property without paying the broker any commission – that is if you are really hell bent on saving that miniscule 5% fee for all his services in helping you sell your property. (Reminder: in the Philippines, your relatives cannot sell your property for a commission – if they are not licensed real estate brokers. Under RA 9646 that is a violation punishable with a maximum P 200,000 fine and /or four years imprisonment).

2.    It allows you to hire other brokers to work for you in selling your property without  any legal obligation to your other broker.


1. Contrary to what others will say, your broker will usually not inform other brokers that your property is for sale – you have to do it yourself. We brokers are very good in playing our cards close to our chests – these listings are our bread and butter, remember? Owners have the wrong notion that since the property is open – then a lot of real estate brokers will compete for the commission – and therefore, many will eventually end up selling his property. In fact, in practice this is not always so.

In reality, each broker or salesman who knows that your  property is for sale will try to kept it to himself. Why? because he does not want to share it with his competitors. Why should he? So that other brokers will also go to the you, the owner, and also secure a NEATS? No way.

2. Your broker will not also advertise your property for sale – you have to do it yourself also. For the same reason as in No. 1 above. I have at least two sad experiences (when new to the real estate brokerage before )  wherein I publicized properties for sale (to help a relative) – spending a lot of money with a local newspaper, and paying for the for sale sign on the property – only for it to be sold by another relative (a fly by night salesman) – without even a single cent returned, or even just a thank you for all my efforts!

Exclusive Authority To Sell


1.    The broker will freely share the listing with other brokers, and may even enroll it in the multi-listing services among brokers – if it can fast track the sale of your property – after all, he has no fear of the listing taken off from him by others. In practice, this will radically increase the info all around that your property is for sale – to your advantage. Well, you may say – why should not I just use the internet to multilist my property for sale myself? It depends where you are really. This idea may be feasible in some places, but not in places where most people do not shop for properties in the internet, anyway.

2. The broker may also install for sale signs or aggressively advertise on your property – at his expense – for exactly the same reason as in no. 1 above.


1. Even if your property is sold by another – even by yourself – then your broker is legally entitled to receive the 5% fee, or commission for the sale of your property. Suggested solution: if you have a buyer prospect, then inform your broker, and let him do the work for you.  Also have limited EATS of say 3 months. Then you can just let the EATS naturally expire (without renewing it, of course) if you are not happy with the services of your broker. Never issue an EATS without a time limit!

2. If your broker is lazy then your property is tied up to him for the duration of the EATS. Suggested solution: always include a time limit in your authority  to sell – so that you can change brokers sooner. Also hire a licensed broker with whom you have confidence with – in the first place.

Well, all in all,  it may be advantageous to just to hire a broker, and issue an exclusive authority to sell for a limited duration. Hire a real estate broker with whom you are reasonably confident will help you sell your property fast.

Caveat venditor!   (Latin for Seller’s beware)


1 thought on “Free Advice on How to Prepare the Authority To Sell : EATS V.S NEATS

  1. Great post. How if the owner wants you to sell his property but he doesn’t want to sign an authority to sell?

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