What is a Listing Agreement?

What is a Listing Agreement?

A Listing Agreement is a formal contract between someone who owns a property (the seller) and a licensed real estate agent or broker. This agreement sets out the terms and conditions for how the agent will help the seller in selling their property.

This legally binding contract between a property seller and a real estate broker/agent. It authorizes the agent to market and list the property on the seller’s behalf. It also defines the terms, obligations, commission, and duration of the relationship.

Key contents of a listing agreement include property details, listing price, broker’s duties, seller responsibilities, commission terms, contract duration, MLS authorization, required disclosures, and cancellation terms.

There are two common types of listing agreements in the US real estate industry:

1. Exclusive Right to Sell Listing Agreement:

This gives the chosen real estate agent the exclusive right to represent and sell the property. Regardless of who finds the buyer (even if it's the seller), the agent is entitled to the agreed-upon commission.

2. Exclusive Agency Listing Agreement:

In this type of agreement, the agent has the exclusive right to represent the property, but the seller reserves the right to find a buyer independently. If the seller finds a buyer, the agent will receive a pre-defined commission.
Overall, the Listing Agreement is a crucial document that clarifies the roles, responsibilities, and financial arrangements between the seller and the real estate agent during the process of selling a property.