What is a Listing Agreement?

If you decide to hire a real estate agent to sell your property, you'll be asked to sign a listing agreement. This is a contract between you and the real estate agency that details everything from how much they'll get paid in commissions to how long you'll hire them to sell the property.

Commission

It's expected that a real estate agent will earn a commission on the sale. However, it's important to make sure that the listing agreement states that they'll only get that commission if they close the deal on the sale. Some agents try to broaden the scope of the listing agreement in such a way that they earn a commission no matter who closes the deal. If you're not sure of the "fine print" in the contract, hire an attorney. You don't want to owe money to more than one agent because you signed an agreement that you did not understand.

Other Terms

The listing agreement should also clarify who will pay the costs of advertising. If the agency agrees to buy ads on the seller's behalf, then make sure there's a cap on how much the real estate agent can spend.

It's also important to include the length of the agreement, and the rights of all parties once the term has expired. And, last but certainly not least, be sure you are certain about the sales price listed on the agreement.

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