The Listing Agreement? A Basic Guide For Home Sellers

David Fresquez

|

May 20, 2023

Scroll down arrow

Selling a home can be a daunting task, especially for those who are unfamiliar with the intricacies of a real estate transaction. Even if you're more than prepared to get your property on the market with a trusted real estate agent, you probably just can’t get down to business without doing this critical step: signing a listing agreement.


Signing any contract can be nerve-wracking and intimidating. But it doesn't have to be if you understand what the document means. Your agent should also walk you through each part of the service agreement. In this blog post, we’re giving you a headstart to help you understand what a listing agreement entails, and how it plays into selling your property.


A listing agreement is a legally binding contract between a homeowner and the real estate agent or broker who will be listing the property for sale. The agreement outlines the terms and conditions under which the agent or broker will market and sell the home, lays out a framework of duties and expectations between the seller and the agent, and includes several essential details about the upcoming sale.


Only home sellers need to sign a listing agreement. For potential buyers, they will have to sign a buyer's agency agreement before an agent will represent them. You’ll only sign the listing agreement after you and the agent have agreed on all the details of the home sale. You can think of it as an employment contract, as you are officially hiring the agent for the job of selling your house. No money should be required upfront when you sign, as agents are paid with commission fees at closing.


The listing agreement is meant to protect both parties. It protects the seller by defining the agent’s responsibilities and what to do if he or she doesn't meet them, preventing you from being tied to an agent that is not fulfilling their end of the service agreement. Meanwhile, it also ensures that the real estate agent is fairly compensated with a guaranteed commission once they execute a successful home sale.


Before we explore the necessary details usually included in a listing agreement, here are the most common types of listing agreements. Your agreement type is often listed at the top of the document itself. The terms can also vary based on the area where you live, so it's a must to read the agreement closely to understand the specific contract you have with your broker or agent.


Exclusive right-to-sell


This is the most common type of listing agreement. As defined by the National Association of REALTORS®, an exclusive right-to-sell listing agreement is a contractual agreement under which the listing broker acts as the agent or as the legally recognized non-agency representative of the seller, and the seller agrees to pay a commission to the listing broker, regardless of whether the property is sold through the efforts of the listing broker, the seller, or anyone else. 


To put it simply, you’ll be working exclusively with one agent to sell your house within a definite period of time. The broker is entitled to their commission regardless of who sells the property, as long as the listing agreement is in effect.


Exclusive agency listing


This type of listing agreement, it’s similar to an exclusive right-to-sell listing where the broker acts as the agent and any agent in the agency may sell the property and collect the commission. But in this case, the seller still reserves the right to sell the home on their own if they choose. And if the property is sold solely through the efforts of the seller, he or she is not obligated to pay a commission to the listing broker.


Open listing


This is a non-exclusive agreement that allows the seller to use multiple real estate agents to sell their home, but the agent who sells the home is the only one who gets a commission. If the homeowner succeeds in selling the home themselves, the agents walk away empty-handed, which is why these kinds of agreements are less common and are generally less favored by agents.



Here are the main components of a listing agreement:


Contact information - includes names, phone numbers, addresses, and other information for the seller and the real estate broker or agent.


Property description - the listing agreement will include a complete and accurate description of the property. The property description also specifies any fixtures that will be left behind after the property is sold, and which items will not be included in the sale and you'll be taking with you when you move.

David Fresquez
looking Forward to connecting with you!
Let's Chat, Send Your message:
Here is an error message.
Thank you for connecting,
I'll be in touch!
Oops! Something went wrong while submitting the form.
David Fresquez

Here For All Your Real Estate Needs!

Click The Button Below And Let's Get Started

Connect With MeConnect With Me
David Fresquez
Realtor
(858) 336-9899
david@myrealestatebuddy.com
9847 Campo Rd
Spring Valley, CA 91977
DRE 01394029
Pacaso 2nd Home Vacation & Solar Specialist
Let's Work Together
Complete the form below and we will reach out right away!
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Success!
Your Information Has Been Received
Thank you for your message. We appreciate your patience and look forward to connecting with you! We will be in touch shortly.
x out
This Website Is Not Authorized
Login or contact us to unlock your website at
team@authorized.company
Login To Unlock