A listing agreement is a written contract that is signed between the seller of a home and the company that is brokering the sale. Usually, the seller works with an agent, and the agent works for a brokerage firm. The listing agreement is between the seller and the firm.
The listing agreement is usually required before the brokerage and its agents can act on behalf of you to sell your property. The agreement gives them certain abilities to promote your property and find someone to buy it.
While each list agreement might be slightly different, the contracts tend to contain the same type of information. Obviously, the listing agreement will include some identifying information about you, the brokerage and the property in question. It should also include the date the agreement starts and provide a timeline for how long the agreement will last.
When reviewing a listing agreement, make sure you look for information such as the compensation expected by the brokerage or agent. You'll also want to double check any information about your property and ensure the listing price is agreeable to you. The agreement will also probably have to include details about the financial situation surrounding the property: Do you own it outright, or is there a mortgage involved?
Other issues the might be included in such an agreement could include easements, liens and information about property taxes. You might also see language about disclosure. Disclosure requires that a seller be forthright and honest about any defects or other issues with a property.
When dealing with real estate transactions, if you don't fully understand paperwork such as a listing agreement, you should seek assistance before signing. Working with a legal professional on real estate contracts can help you avoid poor sales or transaction decisions and experiences.
Source: The Canadian Real Estate Association, "Advice for Sellers," accessed Nov. 27, 2015
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