What is Listing Contract?

Legal Definition
A listing contract (or listing agreement) is a contract between a real estate broker and an owner of real property granting the broker the authority to act as the owner's agent in the sale of the property.

If the broker is a member of the National Association of Realtors, the agreement must include all of the following terms:

  1. A beginning date and a termination date.
  2. The list price at which the property will be offered for sale.
  3. The amount of compensation offered to the broker, whether it is in the form of a flat fee or percentage of the sales price.
  4. The terms and conditions under which the brokerage fee shall be paid by the seller.
  5. Authorizes the broker to co-operate with other brokers as sub-agents or buyer's agents and details the compensation to be offered to those brokers in the event they procure a buyer.
  6. Authorizes the broker to reveal or not to reveal the existence of offers previously received.

In addition, other terms which may appear in the agreement can include:

  • Authorization to the broker to post a sign, to advertise the property, and to put a lockbox on the door, as well seller's obligations to advise the broker on the condition of the property, and broker's obligations to advise the seller about regulations and laws which may affect the sale.

Typically, separate listing agreements exist for the sale of residential property, for land, and for commercial or business property.

Upon listing the property, the real estate agency tries to obtain a buyer for the property and, in consideration of successfully finding a satisfactory buyer, the broker anticipates receiving a commission (fee) for the services the brokerage provided.
-- Wikipedia