listing contract is a personal service contract between you and
a licensed real estate broker. This contract authorizes the broker
to act as your agent by finding someone to buy your house. The listing
contract contains two basic promises: The broker promises to do
his or her best to find a buyer for your property, and you promise
to pay the broker a commission. Legally speaking, the definition
of a listing contract is a bit more complex:
employment contract: A listing contract specifies the exact
terms and conditions of your employment contract with a licensed
real estate broker. It also authorizes the broker to represent
you during the sale of your property.
compensation agreement: Although the listing broker's pay
is almost always a commission based on a specified percentage
of the sale price, compensation doesn't have to be a commission.
Other negotiable options include paying your broker a set fee
for selling the property or compensating the broker on an hourly
Although the listing contract doesn't obligate you to sell your
house, it may obligate you to pay the broker a commission even if
you don't sell.
Considering the types of listings
your various listing options boil down to variations on two types
of listings: exclusive listings and open listings.
An exclusive listing is exactly that -- an exclusive authorization
giving only one broker the right to find a buyer for your house
-- though there are two very different types of exclusive listings.
Exclusive right to sell listings is the most common listing type
and popular with both sellers and brokers.
open listing is a non-exclusive authorization for brokers
to find a buyer for your property. You can give as many brokers
as you wish an open listing on your house.
See each section for details on how each type works, their advantages,
disadvantages and risks.
To Seller Services
Next Step: Exclusive Listings