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.
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.
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.
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.
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.
Agent duties – the agent’s responsibilities and detailed plan of action will be specified in this section, together with the activities the listing agent is authorized to conduct on your behalf. This may include holding open houses, listing your home on the MLS, posting a yard sign, etc. Understanding the agent’s responsibilities will give you a clear idea of what they will (and will not) do during the selling process.
Take the time to review the listing agreement to ensure that all provisions of the contract are correct and include things you and your agent agreed on earlier. Also, make sure that you understand all your agent’s obligations to you, as well as your duties and responsibilities as a seller.
You can terminate the listing agreement if you decide that you no longer want to sell your property. Likewise, you can also end the agreement if you do not want to work with your agent or broker anymore and they haven’t found a buyer for your home. Most agents will agree to cancel a listing agreement if the client is unhappy, as long as they don’t have an existing buyer yet.
This is why it’s important to choose a top and trusted real estate agent to help you sell your home. Do your research, interview at least three agents before hiring, and review the fine print before signing a listing agreement with them.
