The Listing Agreement
Also referred to as a listing contract, is a document or documents granting a licensed real estate professional and their broker authorization to act on behalf of a seller in the sale of a piece of property. Listing contracts come in all shapes and sizes, but there are characteristics which are common to all. Among the elements of any valid listing contract are:
Writing - All real estate contracts must be in writing.
Employment - The listing contract is a service contract between the seller, the agent and their broker. It contains all of the terms and conditions of employing the broker and authorizing the broker to represent a seller in the marketing and selling of the property.
Compensation - For any contract to be valid, there has to be compensation. The listing contract will specify the amount and timing of payment to the agent and the broker. The compensation is an agreed amount that will be paid to the Listing broker when the sale closes escrow. Compensation rates can be a percentage of the final sales price, a flat fee, or other. Compensation rates are not set and there is no standard. There may be traditional rates common in a particular area but they are not set by any broker, board, or department. The rate or form of compensation is an agreement between the listing agent/broke and the seller.
It is important to note that a seller’s obligation to pay the compensation to the agent/broker may not absolutely depend on a finalized sales transaction. The broker and agent were hired to perform certain tasks, amount them producing a Ready, Willing and Able buyer. If the seller is presented with an offer and for example, at the last hour decides they really don’t want to sell and refuse the offer, the broker may be entitled to compensation. They performed the task for which they were employed. It is the broker’s decision at that point to determine if they will pursue the terms of the contract and demand compensation.
Title - All listing contracts will ask who has title to the property. Property cannot be sold unless everyone with holds title interest in the property are part of the sale. All parties must agree and must sign the listing agreement.
Termination date - In Arizona, there are no open ended listing agreements. They must include a start and an ending date. There is no set in stone time frame for a listing agreement to remain in effect. The duration of the agreement is determined by agreement between the broker and the seller. A Listing Contract is a legally binding document that binds all parties to act in a certain way for the duration of the agreement. If the contract expires before the property sells it is a simple matter of extending the agreement in writing by signing and extension order or a new agreement.
There can be and often are other elements to a listing contract. As with any legal document, a seller should read the document carefully and understand their obligations under the agreement before signing. Any questions should be addressed with the agent or the seller can consult with an attorney before signing the agreement.
The Agreement - will differ from Real Estate Board to Board, and from State to State. Every State has different Rules and Statutes regarding a Real Estate transaction. For example and agreement in the Phoenix Metro Market will contain different verbiage than an agreement in the White Mountains of Arizona area. Different areas require different verbiage to address issues specific to that area. Remember, all real estate is local so every area is unique.
If you have been considering selling your property, call me. I have been listing and selling property in the White Mountains since 2002. Let’s work together to get your property sold. Thank you for your consideration.
Sandra Paulow, Associate Broker, GRI, REALTOR®
From “Sign Up” to “Sign Down”
EXPERIENCE makes the difference.
SUCCESS WITH SANDRA!