WHAT DO I NEED TO KNOW ABOUT A REAL ESTATE LISTING AGREEMENT

Written By Jennifer Wilson

If you are hiring a Realtor to market and sell your home, you are most likely going to be presented with a Listing Agreement. In short this is a contract between you, the owner, and the Real Estate Brokerage. This allows them to market your property for sell at agreed upon terms. There are a few different types of Listing Agreements:

  1. Exclusive Right-to-Sell – Most Common. One Broker company is contracted as the sellers sole agent. Broker receives commission no matter who sells the property.
  2. Exclusive Agency – Seller retains the right to sell the property without obligation to the Broker. If the Broker sells the home, the seller is required to pay commission to the agent.
  3. Open Listing – This allows the seller to hire multiple agents to market their property.

Each state or Broker may have their own version of a Listing Agreement. You always have the right to review said agreement with a licensed attorney prior to signing the contract. Never sign a Listing Agreement unless you fully understand each part of the agreement. The Broker must also leave you a hard signed copy of the agreement upon execution.

The listing agreement must contain:

  1. Names of parties in the agreement
  2. Property Address
  3. Length of Agreement
  4. Total compensation to be paid – Listing Agent, Selling Agent, Transaction Brokers (if applicable)
  5. How is the Broker compensated
  6. Roles of each party. Listing Agent, Brokerage and Seller
  7. What happens if a legal dispute arises.

The listing agreement should leave you with a clear understanding of all agreed upon terms. If you are not clear, ask questions and refrain from signing.

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