Listing Agreement: What to Know Before You Sign

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Sep 20, 2022

Planning on listing your home soon? Once you do your research and choose your real estate agent, you’ll be presented with a listing agreement to sign. This written contract contains the details of the arrangement between you and the agent. This agreement kicks off the selling process and sets the stage for the time the home is on the market.

While the agreement may seem simple enough, you likely have a couple questions about what this listing agreement includes and why it is so important. To help you out, here is a list of what to know before you sign your listing agreement.

What is a Listing Agreement?

Before signing a listing agreement, you should probably know what it is. A listing agreement is a legally binding contract between the seller and the real estate brokerage they intend to list their home with.

The agreement states that the seller is hiring the agent to handle the sale of their home. It also authorizes them to find potential buyers. In exchange for these agent services, the seller agrees to pay the agent a commission fee. This fee is typically factored into the listing price of the home.

How Does a Listing Agreement Work?

The listing agreement is signed after the seller and the agents have discussed the details of the transaction. Signing the agreement lets the agent know that the seller is ready to move forward with the selling process.

Certain parts of the listing agreement can be negotiated by the seller like the commission fee, agent responsibilities, listing price, agreement duration, and the listing type.

Most listing agreements last anywhere from three to six months. If the home doesn’t sell within the agreed upon time frame, the seller can re-sign the listing agreement with the same agent or find another brokerage to work with.

What are the Types of Listing Agreements?

There are more than just one type of listing agreement a seller can sign. Here are four of the most common types of listing agreements. Do your research on each and discuss with your agent which is the best option for you and your specific situation.

  • Exclusive Right to Sell Listing: This is the most commonly used listing agreement type between sellers and agents. An exclusive right to sell listing gives the agents the exclusive rights over the transaction and is entitled to the agreed upon commission regardless of who sells the home. As long as the listing agreement is in effect, the agent has full control and rights to their commission.
  • Exclusive Agency Listing: This common listing type is similar to the exclusive right to sell except the home seller can get out of paying the agent commission if they find a buyer to purchase their home themselves without their agent’s assistance. While this allows the seller to fall back on the agent support in case they can’t find a buyer themselves, most agents are a bit reluctant to agree knowing that their commission is not guaranteed.
  • Open Listing Agreement: An open listing agreement offers the least amount of commitment. This non-exclusive agreement allows the seller to use multiple real estate agents to sell their home. Only the agent who sells the home receives the commission. This agreement type also allows the seller to find a buyer. If the seller succeeds, the agents walk-away without any commission. Due to the lack of guaranteed commission, most agents are wary of this agreement type.

What is Included in the Listing Agreement?

A real estate listing agreement consists of several components that provide details about upcoming sale. Expect to see the following in your listing agreement:

  • Contact information: This includes the names, phone numbers, email addresses, and other contact information for the seller and the real estate agent.
  • Listing price: This is the sale price that the home will be listed at. The listing price is decided on between the seller and agent prior to the agreement signing. Make sure that this number matches what you and your agent have previously discussed.
  • Agent fees: Real estate agent fees vary. However, most total commissions are around 6% of the home’s final sale price. This is split between both the buyer and seller (usallu 3% each. These agent fees can be negotiated depending on the level of service the seller requires. Some brokerages even offer sellers reduced agent commissions as low as 1%.
  • Agent duties: The listing agreement lists out the responsibilities of the real estate agent and what they are permitted to do. These agent expectations are discussed prior to the listing agreement being written.
  • Type of listing agreement: This is where the type of listing agreement is detailed. The type of listing agreement that you have defines the relationship between the seller and the agent based on the seller’s level of involvement in the sale of their home.
  • Property description: This componant of the agreement lays out the details of the property itself including items that are being sold with the property, as well as those that are not included.
  • Agreement duration: This is the amount of time that the agreement will last before it is terminated. Most agents prefer a six month term to give themselves plenty of time to sell the property. While six months tends to be the default, this time frame can easily be negotiated and changed.
  • Conflict resolution details: This part of the listing agreement lays out how potential conflicts will be handled between the seller and the agent. Most of these conflicts are resolved by mediation or arbitration. While these conflicts are rare, it is nice to know how to handle them if they do happen.
  • Protection periods: The protection period or clause in the listing agreement protects the agent from losing their commission. This period goes into effect when the buyer is unable to close until after the listing agreement duration expires. The protection stays in effect for a period of time afterwards so the buyers and purchase and the sellers agent can earn their commission.


As a seller, its important to know what you are getting into before you sign the listing agreement. Know that you know the ins and outs, its time to sign the contract and get that home listed!

If you are still in need of an agent to help you sell your home, contact our team at SimpleShowing to learn how you canget a full-service experience for a low 1% listing fee. Fill out a home valuation here to get started.

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