What to include in a real estate listing agreement.
Learn more about this standard real estate contract so you can be ready for the sale of your home or property.
You might have heard about listing agreements, but what is a listing agreement exactly? In this guide, we’ll dive deeper into this standard real estate document, ensuring that you’re well-prepared and informed for your next big property move.
What is a listing agreement in real estate?
A listing agreement is a type of real estate contract in which a property owner gives a real estate agent or broker the authority to find a buyer for their property. If you decide to sell your home using a realtor, you will likely be asked to sign a listing agreement.
Learn the basic framework of a listing agreement so you can better understand this type of contract.
Real estate listing agreement types.
Most contracts consist of four basic types of listing agreements. The one you may agree to will depend on the agent or broker you decide to work with and what role you want them to have.
The four types of real estate listing agreements are:
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Exclusive right to sell
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Exclusive agency listing
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Open listing
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Net listing
Elements to include in a listing agreement.
While each listing agreement is a contract between the property owner and real estate agent, most will include the same essential components. Here are the elements that nearly every real estate listing agreement will include:
- Names, addresses, and contact information for both the owner and the agent
- The period in which the property will be listed for sale
- The listing price of the property
- The type of listing agreement being entered into
- The terms of commission, or how the agent will be paid once the property is sold
What should you look out for in a listing agreement?
When you’re getting ready to work with an agent, you’ll want some knowledge of what goes into a real estate listing agreement and what to look out for. That way, you can sign your contract with confidence, knowing you received the best terms possible.
Here are the top four things to look out for in a listing agreement:
- Type of agreement. Learn about the four basic types of listing agreements and know which one you’re signing before you move forward.
- Expiration date. Pay close attention to how long your agent wants to be able to keep your house on the market. If you think your home should sell quickly, you can negotiate for a shorter time frame.
- List price. Document how much money you agree the agent can list your house for.
- Commission. Document how much of the purchase price you’ll pay to your agent. A typical commission for a listing agent is between 5–6%. This percentage cannot be renegotiated after signing, so be sure you’re clear on these terms.
Thankfully, once you sign the dotted line, you can leave the pen in your drawer. You can quickly and securely sign contracts digitally using Adobe Acrobat for business to get your house on the market faster.
Is a real estate listing agreement always required?
The short answer is no — a real estate listing agreement isn’t always required. Nonetheless, a real estate listing agreement is a key element during the selling process for several reasons:
- Legal protection. A listing agreement provides legal protections to both the agent and the seller. This document outlines each party’s responsibilities, the duration of the agreement, the payment amount, and other essential details. Without this agreement, misunderstandings and disputes are more likely to arise.
- Exclusivity. Real estate listing agreements are usually exclusive, meaning that the seller agrees to work with a particular agent for the duration of the contract. This agreement assures the agent that all marketing efforts and resources won’t be wasted if the property isn’t sold.
- Professional representation. A real estate listing agreement establishes a formal relationship between a property seller and a real estate agent. This agreement ensures that the seller has professional representation to help market and sell the property, negotiate deals, and handle other intricacies of the selling process.
Get a real estate listing agreement signed with ease.
Once the real estate listing agreement is signed, refer to a real estate listing checklist to ensure all the necessary elements are included and help sellers and agents navigate the complex process seamlessly.
You’ll want to review your listing agreement carefully before signing to ensure the terms align with your goals for your property sale. Thankfully, getting your agreement signed digitally is much easier. You can use Acrobat to quickly and securely sign documents digitally so that you won’t miss a beat in your home-buying adventure.