Understanding the Listing Agreement When Selling Your Home
The listing agreement is the formal contract between you and your real estate agent, with important details laying out the process.
When you hire a real estate agent, they agree to work to sell your house, while you grant them the legal permission to do so. When the agent is successful, they get paid through a commission, typically 2.5%-3% of the sale price of the home. So, it makes sense that just like any other job, sales transaction, or business agreement, there will be a contract involved.
The listing agreement is the contract between a seller and a real estate agent and covers the time period involved, money spent to help sell the house, and every other aspect and step involved in the home selling process. It’s important that both parties fully understand this document.
This guide will explain the different types of listing agreements, what they cover, what happens when they expire, how long they usually last, what factors are typically negotiated in a listing agreement, and what happens if a dispute arises.
Step One: Talk to an Expert Listing Agent
It takes just two minutes to match you with the top-performing listing agents in your market. Our data shows that the top 5% of agents in the U.S. sell homes quicker and for as much as 10% more than the average agent.
What is a listing agreement?
If you are going to be working with a real estate agent and are ready to get the ball rolling on the sale of your home, a listing agreement is the first step that establishes the formal relationship between seller and agent. The listing agreement is a contract that lays out specific, agreed-upon terms, giving the real estate agent permission to market a home to buyers. No money should be required up front to sign a listing agreement, as agents are paid when a home sale is successfully concluded.
A listing agreement “defines the seller’s role, the agent’s role, and that’s what’s most important,” says Christopher Ferzoco, a top-selling real estate agent in Wildwood, New Jersey, who’s negotiated over 901 real estate transactions.
A listing agreement protects the seller so that they aren’t tied to an agent who isn’t delivering on their service like they should. It also protects the real estate agent, giving them job security and a guaranteed commission if they find a buyer and execute a successful sale.
