The Listing Agreement

Listing your home for sale can be an important first step towards its
eventual sale. But, what is a listing and how does it work?

A "listing" is an employment contract in which property owners authorize a
licensed real estate broker to act on their behalf by procuring a buyer for
their real property for a fee. Listings contain various basic elements such
as: 1) duration of the listing, 2) price and terms, 3) property description,
and 4) commission or compensation.

The duration of the listing is a time period agreed upon by the sellers and
the real estate broker. The listing period can be any length of time, and
may be based on the average selling time for the property being listed.

A listing should also contain the price at which the owners are willing to
sell, as well as any other terms of sale required by the seller. The broker
can then work to procure a buyer "ready, willing and able" to make the
purchase at that price and on those terms.

In order to properly identify the real estate covered by the listing, the
legal description of the property is included. This spells out precisely
which parcel of real estate the broker is authorized to represent.

The commission or compensation to the broker will also be a part of the
listing agreement. It is most commonly stated as a percentage of the final
sale price or as a flat fee, and is usually payable at settlement. Fees are
not fixed by the government or real estate licensing authority, but are
negotiable between the broker and the property owner.

When property owners give a listing to a licensed broker, a new relationship
is created between them, called an "agency relationship". The real estate
broker, the "agent", becomes authorized to act on behalf of the owner, known
as the "principal", for the sole purpose of procuring a buyer for the
property.

Choose your broker carefully. To make an informed decision about listing
your property for sale, ask for a detailed explanation of the listing
process!