Listing Agreement

A listing agreement is contract between a seller and a broker which gives the broker the right to sell the property. Many times, an agent will act as a representative of the broker. If the broker is a member of the National Association of Realtors the listing agreement must contain the following:

• A beginning date and a termination date.
• The list price at which the property will be offered for sale.
• The amount of compensation offered to the broker, whether it is in the form of a flat fee or percentage of the sales price.
• The terms and conditions under which the brokerage fee shall be paid by the seller.
• Authorizes the broker to co-operate with other brokers as sub-agents or buyer’s agents and details the compensation to be offered to those brokers in the event they procure a buyer.
• Authorizes the broker to reveal or not to reveal the existence of offers previously received.

In addition, other terms which may appear in the agreement can include:

• Authorization to the broker to post a sign, to advertise the property, and to put a lockbox on the door, as well seller’s obligations to advise the broker on the condition of the property, and broker’s obligations to advise the seller about regulations and laws which may affect the sale.

The listing agreement may also contain the agreement of a commission or fee between the agent and the seller to be paid to the broker upon satisfaction of the terms of the contract. The agreement will also specify the list price of the home and an date of expiration of the contract.

Three types of Listing Agreements

• Exclusive right to sell : The seller must pay the brokerage a commission if, by the expiration date in the listing contract, the real estate is sold, regardless of whether the buyer is obtained through the agency or not. Even if the seller finds the buyer him/herself, a commission is still owed to the brokerage. Furthermore, the seller cannot list the property with any other broker until the listing expires with the property unsold. This is the most common type of listing agreement.
• Exclusive Agency : The seller can only list the property with one brokerage until the listing contract expires with the property unsold. The seller must pay the broker a commission if the real estate is sold to a buyer obtained through that brokerage. By agreement, if the seller finds the buyer him/herself, the seller does not have to pay a commission. Since there will be no co-operating broker involved, the property will not be listed in the MLS.
• Open Agency : A seller can enter into an agreement to sell his/her property with more than one brokerage in open agency listings. The seller must pay a commission only to the brokerage which brings the buyer for the real estate. Typically, if the seller finds the buyer him/herself, the seller does not have to pay a commission.