A real estate listing agreement is a contract between a property owner and a real estate agent. It allows the agent to handle the property’s sale from beginning to end, including marketing the home, looking for a buyer, and negotiating the terms of the sale.
The agreement covers:
- The asking price ($) for the property.
- The agent’s commission.
- The duties the agent is obligated to uphold.
- The term of the agreement (the “listing period”).
- The agent’s selling rights (exclusive, open listing, etc.).
- The ways the agent can go about marketing the property.
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
Exclusive Right-to-Sell Listing Agreement (Most popular) – Guarantees a commission for the agent as long as the home is sold during the listing period (even if the seller finds a buyer themselves).
Exclusive Agency Listing Agreement – Limits the seller to only working with one agent, but does not provide the agent with a commission if the seller finds a buyer on their own.
Open Listing Agreement – The least binding option of the three listing agreements, an open listing contract allows any agent to find a buyer and receive a commission. Provides a great deal of flexibility for sellers but is a less attractive option for agents.
Lead-Based Paint Disclosure – Must be attached to a purchase agreement (before the parties sign the contract) if the property was built prior to 1978.
Property Disclosure Statement – A form that lists any and all issues or defects with the property. Must be provided to a potential buyer before signing a purchase agreement.
Buyer’s Agency Agreement – A contract formed between a broker and a potential buyer. The broker will show the buyer potential properties, negotiate on their behalf, and handle other responsibilities in exchange for a commission.
Business Listing Agreement – Guarantees a broker a monetary or percentage-based commission in exchange for successfully selling a company.
REAL ESTATE LISTING AGREEMENT
1. THE PARTIES. This Real Estate Listing Agreement (the “Agreement”) made on [MM/DD/YYYY], is between [SELLER NAME] (the “Seller”), with a mailing address of [SELLER ADDRESS] and [BROKER NAME] (the “Broker”), of [AGENCY NAME] (the “Agency”), with a mailing address of [AGENCY ADDRESS].
Collectively, the Seller and Agency shall be referred to as the “Parties”.
2. REAL PROPERTY. The real property that is the subject of this Agreement is located at the address of [PROPERTY ADDRESS]. The Seller warrants and acknowledges to be the owner of the Property and that no other individuals or entities have title. The aforementioned real property, personal property, and included fixtures shall be hereinafter referred to as the “Property”.
3. RIGHTS TO SELL. The Seller grants the Agency: (check one)
☐ – Exclusive Right-to-Sell
☐ – Exclusive Agency
☐ – Open Listing
4. PURCHASE PRICE. Under the terms of this Agreement, the Seller hereby grants the Agency rights to sell the Property for the following amount: $[PURCHASE PRICE].
5. LISTING PERIOD. This Agreement shall start on [MM/DD/YYYY] and end on [MM/DD/YYYY] at 12:00 midnight (the “Listing Period”).
6. COMMISSION. The Agency, as compensation for finding a Buyer that is willing and able to purchase the Property, shall receive a percentage based on the sales price in the amount of [#]% (the “Commission”).
The Commission shall be due if the Property is sold or transferred within [#] days after the expiration of the Listing Period to anyone the Broker or the Agency has previously negotiated.
7. COOPERATION WITH OTHER AGENTS AND AGENCIES. During the Listing Period, should a licensee represent a Buyer whose offer to purchase the Property is accepted by the Seller, then that licensee shall be entitled to a commission of [#]%, provided the Buyer completes the transaction.
8. MULTIPLE LISTING SERVICE (MLS). Due to rules administered by the local Multiple Listing Service (“MLS”), all details of any transaction that are procured by the Agency may be used for publication in the MLS. The Seller hereby consents to such publication on an unrestricted basis.
9. DUTIES. The Broker agrees to exercise all reasonable efforts while providing a fiduciary duty to act in the best interests of the Seller. The Seller agrees to make a reasonable effort to accommodate the Broker, including, but not limited to, open houses, showings, Buyer appointments, inspections, testing, and any other requests regarding the use of the Property.
10. INDEMNIFICATION. The Seller agrees to indemnify the Agency and hold harmless from any and all claims, which may lead to a dispute, due to any false information provided.
11. SEVERABILITY. This Agreement shall remain in effect in the event a section or provision is unenforceable or invalid.
12. GOVERNING LAW. This Agreement shall be governed under the laws located in the State of [STATE NAME].
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the Seller and the Agency and supersedes all prior discussions, negotiations, and agreements between the Parties, whether oral or written.
Seller’s Signature: ________________________ Date: [MM/DD/YYYY]
Print Name: [SELLER NAME]
Broker’s Signature: ________________________ Date: [MM/DD/YYYY]
Print Name: [BROKER NAME]
Agency: [AGENCY NAME]
A listing agreement allows a real estate agent to market their client’s property to potential buyers in exchange for a percentage of the selling price. There are three (3) common types of listing agreements, and each of them has a different level of exclusivity with regard to the broker’s relationship with the seller.
1. Exclusive Right to Sell (View)
- Agent preference: Most preferred
- The seller is limited to working with only one (1) agent
- The agent is guaranteed a commission if the property sells
Arguably the most popular type of listing contract, this agreement guarantees the broker will receive their commission as long as the property is sold while the contract is still effective.
This option is most often preferred by brokers as it removes the risk of the seller (or another agent) from finding their own buyer in order to avoid paying the commission. Because this agreement is exclusive, the buyer is prohibited from hiring any others brokers as well.
2. Exclusive Agency Listing (View)
- Agent preference: Adequate
- The seller is limited to working with one (1) agent
- The agent is not guaranteed a commission if the seller finds the buyer
With this type of contract, the seller gives the rights to selling the property to only one (1) broker (like the exclusive right to sell), but if the seller finds a buyer on their own (without the broker’s help), they are not required to pay the broker’s commission.
To summarize, the seller is not allowed to work with any other brokers, but can take an active process in selling the property alongside the broker. This option is not preferred by brokers, but is still the more favorable option when compared to an open listing.
3. Open Listing (View)
- Agent preference: Least preferred
- The seller can work with any number of agents
- The commission is only paid if the agent finds a buyer
This “no holds barred” type of agreement places few restrictions on the seller, allowing them to work with any broker in order to sell the property. This is the common option for FSBO (For Sale by Owner) properties.
While rarely used in comparison to the other types above, it is more common when the market is saturated with buyers and in cases where properties are located in more rural areas or are slightly more difficult to sell.
- Appraisal – Estimates the value of a property. Required by banks to ensure the property’s value matches the value of the loan they provide.
- Covenants, Conditions, and Restrictions (CC&Rs) – Also known as “bylaws,” these are limitations on what a homeowner can do with their property. The rules are typically set by a home owner’s association (HOA), developers, or builders.
- Closing – Finalizes the sale of the property. This is the time when all documents are signed, money is paid to each respective party, and the buyer takes ownership of the property.
- Contingency – A clause that allows the parties to “back out” of the deal in certain circumstances.
- Earnest Money Deposit (EMD) – A payment made from a potential buyer to a seller to convey the buyer’s interest in purchasing the property. Typically paid after the purchase agreement is signed and kept in an escrow account.
- Escrow – An arrangement in which money (such as an earnest deposit) is held by a 3rd party until a specific action has occurred.
- FSBO – An initialism for “For Sale by Owner,” it refers to the process of selling a property without the assistance of a real estate agent.
- Lockbox – A secured device that contains the keys to the property. It hangs around the doorknob, and can only be accessed by other agents for the purpose of showing the property to potential buyers.
- MLS – An up-to-date database run by agents and brokers that contains active listings in a specific area or state.