Once you’ve decided on an agent to list your home for sale you’ll be required to sign a listing agreement. This is a legally binding contract that gives the broker the right to offer your home for sale. The typical listing agreement will set forth the amount of real estate commission you’ll be required to pay, the length of the listing period, the listing price, the seller’s agreement to the installation of a lockbox and a sign on the property and the broker’s responsibilities.

There are three types of listing agreements commonly used.

Exclusive Right-to-Sell: This is the most common type of listing agreement used. The Exclusive Right to Sell does just what it says; it gives your broker the exclusive right to sell your home, regardless of who brings in the buyer. This type of listing gives your real estate broker assurances that after all the work performed and money spent to sell your home, he or she will get paid.

Exclusive Agency: An Exclusive Agency listing is almost identical to the Exclusive Right to Sell with the exception that if you find a buyer you will not owe the listing broker a commission. If your agent or any other agent brings in the buyer you will be expected to pay the real estate commission.

Open Listing: While the first two types of listings are “exclusive,” this one is not. With this listing agreement you will give the broker permission to show your home to potential buyers. In fact, you can assign this listing to as many brokers as you wish but you are only responsible to pay the agent that brings in the person that buys the home.

Open listings may not end up in the MLS since there is truly no incentive for any one broker to market the home. This is almost like being a FSBO (for sale by owner) in that you’ll have no-one representing your interests and you’ll do all the marketing, showing and seller paperwork. The Open Listing, is, in fact, a contract that a buyer’s agent may give to a FSBO homeowner so that he or she will earn a commission. We say “may” because the last listing is also commonly used with For Sale by Owners.

One-Time Listing: Also known as a “Showing Listing,” this contract allows the broker to show the home to one potential buyer that is listed by name in the contract. If that buyer chooses to purchase the home, the homeowner will pay the broker a commission.

It’s important to read and understand the listing agreement. Although we aren’t attorneys and cannot advice you as such, we’re happy to answer common questions about the listing agreement.