A listing agreement is a written agreement between the owner of a property and the real estate broker they select to sell it.
A listing agreement typically gives the broker the exclusive right to sell the property for the duration of the agreement. If the broker is a member of the National Association of REALTORS® the listing agreement must include the following terms:
- A beginning and end date of the agreement.
- The price at which the property will be offered for sale.
- The amount of compensation to be paid to the broker (which is generally a percentage of the sale price).
- Authorization for the broker to cooperate with other agents as sub-agents of the seller and with buyer’s agents.
- Any exceptions to the agreement, such as a list of any buyers the seller may have negotiated with prior to listing.
- The agreement will also typically state activities the broker will conduct on the seller’s behalf to market the property.
Once a broker produces a willing and able buyer, assuming all conditions of the listing agreement are met, the seller owes the broker the compensation described in the agreement.
