What Is a Listing Agreement? Definition, and How They Work

If you have made up your mind to sell your house fast for cash and take advantage of a real estate agent, you are sure to enter into a legal agreement that authorizes you to act on your behalf. Subsequently, the agent will earn a commission on the ultimate home’s sale price that is shared with the buyer’s agent. Similar to any other business or professional service transaction, this agreement is formalized through a listing agreement.

 

It outlines the terms between the seller and the real estate agent, detailing the duration of the contract, expenses incurred to market the home, and the various steps involved in the selling process. 

 

What are the types of listing agreements, what do they entail, what typical duration, what key negotiable elements, what happens when they expire, and how to handle disputes – you need to understand that if you’re looking to sell your house fast for cash since it all can help you choose the best option to quickly and efficiently close the deal. Read on to find out more.

What Is a Listing Agreement?

If you intend to cooperate with a real estate agent and are ready to sell your house fast for cash, signing a listing agreement is the initial step to establish the official partnership between the seller and the agent.

A listing agreement is a document in which a homeowner grants a real estate agent the authority to seek out a buyer for the house under the owner’s conditions. In return for this service, the owner agrees to pay the commission. Typically the listing agreement encompasses a contract between a public organization and the financial exchange .

 

How does a listing agreement work?

In accordance with real estate license laws, only a broker is allowed to act as an agent on behalf of another individual. Most listing agreements require similar information to describe the property since the same concerns arise in almost all real estate transactions. The property description often contains a list of household belongings that will remain with the property after it is sold, as well as a list of personal belongings the seller wants to get rid of (such as furniture and or devices).

 

• safeguards the seller, ensuring they aren’t stuck with an agent who isn’t meeting their expectations
• provides security for real estate agents, guaranteeing them a commission if they find a buyer and close the sale successfully.
• details the asking price, the broker’s obligations, the seller’s responsibilities, the broker’s payment, terms for mediation, a set termination date, and any other conditions or terms.

 

Quote from a a top-selling real estate agent

 

What to be included in a listing agreement

• Property description The listing agreement includes a detailed description of your home, just like all other real estate documents. It guarantees that the information advertised about your home is accurate. For instance, due to incorrect listing details, a wrong property can be shown to a buyer.

• Type of listing agreement. Specifying the type of listing agreement in the contract ensures clear expectations and responsibilities, influences the agent’s commitment, affects the seller’s flexibility, and provides legal clarity.

• The listing price is determined by a real estate agent. Market condition, homes that are sold in the area and the current home state are taken into consideration. 

• Commission. An exact percentage of the sale price that the real estate agent will earn after the successful sale of your home must be specified in the document. The typical commission for the seller is 5-6%. As a rule, it is shared equally with the buyer’s agent.

• Expiration date. Listing agreements typically last three to six months, giving the agent enough time to find the right buyer. In a seller’s market, if you believe your home will sell quickly, you can negotiate a shorter time frame that suits both you and the agent. If you want to sell your house fast for cash with no stress and hassle – we can help you.

• Marketing. A detailed plan of marketing your home is also included in a contract namely listing on MLS and promoting it on social media.

• Contact information. It ensures that both parties can easily reach out to each other through the selling process, helps establish accountability, and serves as a formal record.

 

Can a listing agreement be terminated?

Not every seller-agent relationship will strike gold. Agents must comply with the listing agreement’s obligations, and the seller may terminate the agreement, if the agent does not meet these responsibilities.

Given that selling your home is one of the most significant financial decisions you’ll ever make, it’s vital to scrutinize the listing agreement. It’s of great importance to fully understand and agree with every detail, and don’t shy away from negotiating or making changes before signing. By going for a top real estate agent, you can simplify the process of drafting and executing a listing agreement, making it less stressful and more efficient. This is particularly beneficial if your goal is to sell your house fast for cash.

 

Types of listing agreements

According to NAR, there are 3 main types of listing agreement

• Exclusive right-to-sell listing

This is one of the most common types of listing agreements. The sole real estate agent’s responsibility is to find a buyer and manage all the details. Once the listing agent successfully finds a buyer for your property, he or she will earn a commission. They don’t need to worry about another agent taking the commission, and even if you or another agent brings in a buyer, the listing agent will still receive the commission. 

• Exclusive agency listing

If we are talking about exclusive agency listing, the listing broker acts as an authorized agent representing the interests of the seller. When the property is sold through the efforts of a real estate broker, the seller agrees to pay a commission. When the seller(s) sells the property solely through their efforts, the listing broker does not receive a commission.

• Open listing agreement

This agreement designates the listing broker as the seller’s agent or legally recognized non-agency representative. The seller agrees to pay the listing broker a commission only if the property is sold through the broker’s efforts.

Sell your house fast for cash with Cash Offer Option

If you have decided to work with a real estate agent, Cash Offer Option can help you connect with a trusted local expert and choose the best deal. With our technology-driven approach and exceptional customer support, you will sell our house fast for cash on your timeline. If you need a fair cash offer without endless showings, staging, appraisals, additional repairs, closing costs, and 0% commission – then the Cash Offer Option is the best option for you. Don’t hold on – sell your house fast for cash and cool down.

FAQS
       1. What is a listing agreement?

It’s a legally enforceable agreement between you, the homeowner, and the real estate broker (and agent) you’ve chosen to handle the sale of your property.

2. What are the types of a listing agreement?

There are 3 types of real estate listing agreements: open listing, exclusive agency listing, and exclusive right-to-sell listing. 

3. Is a real estate listing agreement always required?

A real estate listing agreement doesn’t always need to be signed. But it offers crucial legal protection, guarantees professional representation, and grants exclusive rights to an agent, securing their commitment to marketing and selling the property.

4. What happens when the listing agreement expires?

If the listing agreement expires and your house hasn’t sold, the agent will likely discuss extending the agreement or exploring the next steps, such as taking the home off the market or connecting you with a new agent. To keep working with the same agent, you may renew the contract.