A listing contract is an agreement between a real estate broker and the owner of real estate that authorizes the broker to represent the owner in the sale of the property. Listing agreements describe the property, including the fixtures and personal property that will remain with the real estate, the listing price, the duties of the broker and the seller, terms to be negotiated, the termination date of the agreement, the commission and other terms and conditions of the relationship.
The commission earned by the broker depends on the type of listing agreement:
- Exclusive-right-to-sell – A broker is appointed as the exclusive agent of the seller of real estate and authorized by the seller to list and sell the property, with the broker receiving the sales commission regardless of who actually sells the property – even if sold by the owner – while the listing agreement is in effect;
- Exclusive agency – A broker acts as the exclusive agent of an owner of real estate in the listing and selling of the property and is entitled to a commission if anyone other than the owner sells the property, whereby the seller retains the right to also sell the property without obligation; and
- Open listing – Any number of brokers are authorized to act as nonexclusive agents, with the seller retaining the right to sell the property independently without any obligation and only the broker who actually sells the property is entitled to the sales commission.