Valid Listing Agreements

A seller signs a valid listing agreement.

Normally the first step in selling a home involves signing a valid listing agreement, which is a binding contract between a seller and real estate broker. The types of listing agreements are open listing, exclusive agency listing and exclusive right to sell listing.

Open Listing Agreement

Under an open listing agreement, the owner is obligated to pay the broker a commission only if the broker was responsible for finding a buyer whose offer the owner accepts. This is also called a nonexclusive listing because the owner is free to give open listings to more than one broker. The owner could sell the house himself without paying a broker's commission.

Exclusive Agency Listing

In an exclusive agency listing, the owner agrees to list only one broker. However, the owner retains the right to sell the property himself and not pay the broker's fee. The broker is usually motivated to work harder to sell the home.

Exclusive Right to Sell Listing

An exclusive right to sell listing gives the broker the exclusive right to earn a commission by representing the owner, regardless of who finds the buyer. It is the listing that is most commonly used.

References

• Financial Web: "Vital Characteristics of Your Listing Agreement"

Resources

• Bankrate: "The Listing Contract: What's It All About?"
• "Real Estate Principles of Georgia"; Rockwell Publishing; 2007