Real Estate Agent Listing Agreement

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A listing agreement is a contract between a seller that hires a listing agent to sell residential property in exchange for a percentage of the sales price (commission). The commission is paid at the time of closing and, for 2020, was an average of 4.94% according to RealTrends.

Multiple Agents

If there are two (2) agents involved on each side, the total commission is to be shared (depends on the listing agent how much the other agent will be paid).

By State

By Type (6)

Business Listing Agreement – For an entity seeking to sell their business with the assistance of an agent.

Buyer Agency Agreement – For an individual interested in purchasing a commercial or residential property.

Exclusive Agency Listing Agreement – The agency is not paid only if the property sells to a buyer not represented by an agent.

Exclusive (Right to Sell) Listing Agreement – Gives an agent the sole right to sell a property on behalf of a seller for a specific time period (usually 6 to 12 months).

Net Listing Agreement – A net listing agreement is when the agent’s commission is the excess of funds above a fixed number. For example, the seller says they want $275,000, anything over that amount is the commission to the agent. Unfortunately, this practice can lead to unethical issues and is banned in some States (not offered on eForms).

Open Listing Agreement – Allows an agent to sell a property with the condition that if the seller, or other parties, sell the property that the agent is not entitled to a commission.

Table of Contents

Listing Agreement Addendums

Agency Disclosure Forms – Required in most States to inform the role of the agent and their duties as an agent.

Lead-Based Paint Disclosure – Required to be attached to any purchase agreement per federal law. Commonly completed at the time of authorizing the listing agreement.

Property Disclosure Statement – In most States, a seller of a property is required to disclose any material defects. This will be helpful to potential buyers when viewing the property online.

Agency Disclosure

In most states, the real estate agent will be required to have their client sign a waiver stating that they are aware of the agency relationship under a listing agreement. This is commonly authorized at the time of signing the listing agreement and attached with each party receiving an original copy.

Agency Disclosure Forms By State

State Requirement Laws
Alabama Consumer Information Booklet § 34-27-82(c)
Alaska Consumer Disclosure AS 08.88.396
Arizona Sample Form Not Required
Arkansas Agency Representation Disclosure § 17-42-108(a)(2) and § 8.3
California Real Estate Agency Disclosure § 2079.14 & § 2079.16
Colorado Brokerage Disclosure to Seller § 12-61-808(2)
Connecticut Agency Disclosure Notice § 20-325d
Delaware Consumer Information Statement § 2938
Florida No Standardized Form § 475.278
Georgia No Standardized Form § 520-1-.06(4)(b)
Hawaii No Standardized Form Not Required
Idaho Agency Disclosure Brochure § 54-2085
Illinois  Disclosure of Designated Agency 225 ILCS 454/15-35
Indiana No Standardized Form IC 25-34.1-10-10(a)(2) & IC 25-34.1-10-11(a)(2)
Iowa Agency Disclosure and Acknowledgment 193E—12.2(543B)(3)
Kansas Real Estate Brokerage Relationships Disclosure § 58-30,110
Kentucky Consumer Guide To Agency Relationships 201 KAR 11:121 (Section 5)
Louisiana Customer Information Form § 3703
Maine Brokerage Relationship Disclosure § 13279
Maryland Agency Disclosure Form § 17-530
Massachusetts Licensee-Consumer Relationship Disclosure 112 § 87AAA3/4
Michigan Real Estate Agency Relationships Disclosure § 339.2517
Minnesota Agency Disclosure Form § 82.67
Mississippi Working With a Real Estate Broker MREC 1601 4.1
Missouri Broker Disclosure Form § 339.770
Montana Relationships/Consents in Real Estate Transactions § 37-51-314
Nebraska Agency Disclosure Information for Buyers and Sellers § 76-2422
Nevada Duties Owed by a Nevada Real Estate Licensee § 645.252
New Hampshire Brokerage Relationship Disclosure Form § 331-A:25-b
New Jersey Consumer Information Statement § 11:5-6.9
New Mexico Agency Disclosure Form § 61-29-10.2
New York Disclosure Form for Buyer and Seller RPP § 443
North Carolina Working With Real Estate Agents 21 NCAC 58A .0104(c)
North Dakota Disclosure of Agency Relationships in Real Estate Transaction § 70-02-03-15.1.2
Ohio Agency Disclosure Statement § 4735.57
Oklahoma Disclosure of Brokerage Duties § 59-858-355.1
Oregon Agency Disclosure Pamphlet § 696.820
Pennsylvania Agency Disclosure Form § 35.284
Rhode Island Real Estate Relationship Disclosure § 5-20.6-8
South Carolina Disclosure of Real Estate Brokerage Relationships § 40-57-370
South Dakota Real Estate Relationship Disclosure § 36-21A-147
Tennessee No Standardized Form Not Required
Texas No Standardized Form Not Required
Utah No Standardized Form Not Required
Vermont Consumer Disclosure § 4.6
Virginia No Standardized Form Not Required
Washington Agency Disclosure Form § 18.86.030(g)
West Virginia Notice of Agency Relationship § 30-40-26(d)
Wisconsin Broker Disclosure to Clients § 452-135(2)(a)
Wyoming Real Estate Brokerage Disclosure § 33-28-306(a)

Real Estate Agent vs Realtor

A real estate agent is an individual licensed in their respective state (only) to assist buyers, sellers, lessors, and lessees in exchange for a commission.

A Realtor is a licensed real estate agent in addition to a member of their local Association of Realtors (Find Local Office). The Realtor designation gives access to benefits such as the MLS which provides a database of active listings, form software, and e-signature.

Verify a Real Estate Agent

It’s important for real estate agents and their clients to verify that an agent is currently active in the State and allowed to facilitate real estate transactions. In order to verify, select the directory below:

Listing Agent vs Buyer’s Agent

A listing agent is hired by the seller to assist in the marketing and negotiating of their property.

A buyer’s agent, also known as a “selling agent“, is hired by a buyer to help find and negotiate a property.

Referrals

It is common in the real estate community for an agent to refer a client to another agent. Under this circumstance, the referring agent is commonly paid 25% of the total commission. When a client is recommended to another agent, a Referral Agreement is required to be signed.

How to List and Sell Property

A real estate agent is a salesperson. Therefore, the first party that is needed for them to ‘sell’ are their clients, the homeowners. An agent is able to represent potential buyers but the majority of prominent agents have what are known as ‘listings’ which are various properties that the agent has listed for sale.

Step 1 – Make a List of Potential Clients

The real estate agent should compose a list of expired listings, for sale by owners (FSBOs), and any other leads in the area. Afterward, the agent should begin cold-calling and setting up meetings with the homeowners.

Step 2 – Begin Cold-Calling

Once a list has been made, it should be entered into Microsoft Excel or a Google Sheet in order to keep track of all communication that is made. It’s best to understand the needs of every homeowner and, in most cases, they are being contacted by multiple agents in the area seeking their business.

Therefore, it’s best to only attempt scheduling the meeting over the phone.

Step 3 – Compare Sales Data

After scheduling a meeting with the homeowner, the agent should begin to prepare and gather sales data in the area of the property. This can be done by using the agent’s local Multiple Listing Service, or simply ‘MLS’ (if the agent is a Realtor), or by using Zillow.com and local assessor’s data. Find out how the home compares with those that have recently sold. 

Step 4 – Write the Listing Agreement

This is a basic agreement that was most likely taught in real estate school prior to obtaining a real estate agent license. The agreement outlines payment and the rights of the real estate agent such as:

  • Commission Payment (%)

According to RealTrends, the average commission in 2017 was 5.12%. This does not mean the agent shouldn’t ask for more but is a good resource to know when walking into the meeting.

  • Exclusive Right-to-Sell

The agent should try to get an exclusive right-to-sell the property. This means that no matter how the property sells during the listing period the agent will be due a commission.

  • Time-Period

The agent should request to have the listing for 6 to 12 months. This will give the agent more than enough time to properly market the property.

  • Signage

Often times an owner will not want a sign in front of the property. According to Realtors, an average of 7% of buyers is found through the “For Sale” sign in the front yard. The importance of this also is determined by the traffic count on the street where the home is located.

Step 5 – Gather Required Disclosures

It’s important to get as much information out of the way in the meeting with the homeowners as possible, therefore, all required disclosures such as the Property Disclosure Statement, Agency Disclosure Statement, and any other State or local required document should be completed at this time.

Step 6 – Marketing the Property

After the listing agreement has been signed by the homeowners, it’s time to market the property by any means necessary. This should involve the following:

  • Place the Home for Sale Online

The agent should list the property on the Multiple Listing Service (MLS) which will place the home on Realtors.com, Zillow.com, Trulia.com [IS THERE A WEBSITE THAT ALLOWS AN AGENT TO DO THIS ALL AT ONCE?], and ______

  • Have an Open House

The property should be shown to the public via an open house. This will allow anyone who is looking to purchase a home to be able to preview the property without having to make an appointment. Use the Open House Sign-Up Sheet to follow up and see if any of the potential buyers had an interest or if they need representation themselves.

  • Stage the Property

In some cases, the home is not properly furnished to best show how the property should look and feel. Therefore, the use of a designer may be a good investment by the homeowners or agent to paint rooms or rent furniture that matches the intended buyer.

Any and all attempts should be made to not only attract a buyer but get the maximum price for the home.

Step 7 – Receiving an Offer

 After prospective buyers are shown the home and is priced accordingly, the offers should begin to start. Some will be “low-ball” and others will be closer to the asking price of the seller. When an offer does come through, it will be in the form of a Purchase Agreement, and will usually have an offer span of 3-5 business days for the seller to respond.

The seller has three (3) options:

  •  Acceptance – Accept the terms and conditions put forth by the buyer and close the transaction within the stated period.
  • Counter-Offer – Accept some or most of the terms provided by the buyer although changing some of the details, usually the price and non-refundable deposit.
  • Reject – This is in the case when the offer was so low there is no point of even coming back with a reasonable counter-offer. This is only applied when the offer was an insult to the value of the property.

If an offer is accepted, the deal is not valid until the buyer has been given notice that the offer has been accepted by the seller.

Step 8 – Buyer has the Property Inspected

After the home is under contract the buyer will begin their due diligence period. In most cases, the buyer will be seeking to have the property inspected to ensure all plumbing, electrical, and exterior portions of the residence are in sound condition. If anything that was not mentioned in the Property Disclosure Statement is found, depending on the terms of the agreement, the buyer may be able to cancel the Purchase Agreement without losing their deposit.

Step 9 – Attending the Closing

After the buyer has received financing, unless they were paying cash, a closing date will be scheduled. This will involve real estate attorneys on both sides as well as the real estate agents, title companies, and any other parties that should be in attendance. At the closing, all documents will be authorized, including the Deed, which will officially transfer the property into the buyer’s name. After the closing has concluded, the deed will be filed with the Registry of Deeds, and the transaction is complete.

For Sale By Owner (FSBO)

A for sale by owner, commonly known as an “FSBO“, is a property that is attempted to be sold by the owner of the property. FSBOs are also a common target by real estate agents for cold-calling and marketing in an attempt to get the property as a listing. Therefore, if an owner of a property is seeking to sell it on their own, they should be prepared to handle the bevy of calls and emails by agents in their area.

Average Real Estate Commission

The average real estate commission in 2020 was 4.94% according to Real Trends. This does not mean the agent shouldn’t ask for more percentage or accept a lesser amount. There are many factors that determine the commission rate such as:

  • The Market – In a seller’s market the agent will commonly get less, in a buyer’s market the agent will commonly be paid more;
  • The Agent – If the agent is well-known in the area, he or she will demand more, if the agent is an amateur or new, he or she will expect less;
  • Services being Offered – Some agents offer additional services such as advertising the property online and in print, staging the property with the agent’s own furniture, lawn care, and any other services in order to help promote the sale.

Disclosed Dual Agency

A disclosed dual agent, or “transaction broker”, means that they will be the only agent representing the best interests of both parties. The agent does not have a fiduciary duty to either the buyer or seller.

Disclosed dual agency is prohibited in eight (8) States (Alaska, Colorado, Florida, Kansas, Maryland, Texas, Wyoming, and Vermont). Although, each State has a work-around where the agent can act as a “neutral agent” and work in some manner for both the buyer and seller.

Multiple Listing Service (MLS)

The multiple listing service, or “MLS“, is a service provided by the Association of Realtors in your area that is a database of property listed for sale. Before the days of the internet, the MLS was the only updated source for real estate for sale. Access to your local MLS is only available to licensed Realtors.

Earnest Money

Earnest money is a payment made by the buyer when an offer is presented to the seller that expresses the seriousness of the buyer. Earnest money is usually non-refundable but commonly will have conditions that it is refundable in the chance there are issues with the building inspection, appraisal, or any other contingencies by the buyer.

Lockbox

A lockbox is a secured box commonly utilized by real estate agents to let other agents in a house that is for sale. The code or password to the lockbox is listed on the MLS and is able to be accessed by any Realtor. The listing agent should always be notified before entering the property to ensure the owners, tenants, or occupants are not on the premises.

Terminating a Listing Agreement

Terminating a listing agreement, in most cases, requires the consent of the real estate agent. Upon the client’s request to terminate, the agent’s first instinct is to believe the client is attempting to get out of paying a commission. Therefore, unless there is language allowing the client to cancel, both parties will be bound to each until the end of its term.

Otherwise, if the real estate agent requests to terminate the agreement, the client is inclined to agree as the agent is basically saying they do not wish to perform their services any longer.

How to Write

Download: Adobe PDF, MS Word (.docx) or OpenDocument (.odt)

I. The Parties

(1) Listing Agreement Date. Dispense the calendar date marking when the Property Seller and the Agency representing him or her formally agree to the terms of this paperwork.

(2) Seller Identity. The Seller may be a Private Citizen or a Business. So long as this Party is the Owner of the concerned property and has the authority to seek to sell it then he or she can participate in this agreement. Each Seller entering this agreement by signature must be named in the “Seller” section of the first article. List each one by name and address where this information is requested.

(3) Seller Address.

(4) Broker. In many cases, a Broker will work on behalf of a Real Estate Agency or Firm with the Seller to list the property being sold. Name the Broker who intends to work with the Seller.

(5) Agency. The legal name of the Agency represented by the Broker should be displayed. Note that it is imperative that the legal name of the Agency be reported including its status suffix (i.e. LLP).

(6) Agency Mailing Address.

II. Real Property

(7) Street Address. The property the Agency will list for sale on behalf of the Seller should be defined through this agreement. Thus, place the street address where the Seller’s property can be located, seen, and visited physically in Article II.

(8) Legal Description. It is imperative that the property being sold is identified as it is known in its County’s land records. Therefore obtain the Tax Map/Lot Number and Deed Book/Page information from the County Clerk or Recorder’s office where this property is located. There will be a separate space reserved for each of these items of information in Article II along with an additional area where any “Other” property record (i.e historical landmark status) can be recorded.

(9) Fixtures. Many properties will have fixtures attached to them (i.e. a landscaping item meant to add to the aesthetics of the property such as an awning or coy pond). It will be assumed that all property fixtures will be included with the sale of the property. Any that should not be considered a part of the property being sold should be listed in Item B.

(10) Personal Property. Some sales may include personal property of the Owner in addition to the main structure (i.e. landscaping equipment). If this is the case then produce a list of all the Owner’s personal property that shall be included with the real estate purchase. Item C is reserved for this list however if more room is needed, use an attachment to present it. Keep in mind any personal property of the Seller not presented in this list will not be considered part of the real property purchase.

(11) Page Acknowledgment. The Seller, as well as the Broker, will both be required to review this page then provide some proof of approval to its content. After reading through the completed information, the bottom of the page should be initialed by both Parties. Each page of this document will require this act.

III. Rights To Sell

(12) Status Of Agent’s Exclusivity To Property Sale. The level of the Agent’s right to sell the property should be defined. Three levels are available to choose from in this contract through the options n Article III. Select the first statement if only the Agent will have the “Exclusive Right-to-Sell” the concerned property.

(13) Exclusive Agency. Select the second statement if the Agency can only claim this right to sell the property and gain its commission payment by producing a Buyer. Bear in mind that this option will mean that the Agency will only receive a fee if it is responsible for finding a successful Buyer.

(14) Open Listing. If this will be an “Open Listing” which will allow the Seller to advertise or list for this property through separate means then select the third statement.

IV. Purchase Price

(15) Property Selling Price. Record the amount the Seller expects to receive as payment for the real property that was defined earlier. Produce this information as a written number then record it numerically.

(16) Page Review.

V. Period Of Agreement

(17) Commencement Date. The first calendar date when the Property Seller and the Agency will be obligated to follow this agreement should be documented. Once this date occurs both these Parties must immediately begin satisfying the conditions this paperwork imposes.

(18) Ending Date. The last calendar day when this agreement is active should be documented. Neither Party will be required to follow this agreement or expected to once the date reported here passes save for the listing extension.

(19) Listing Period Extension. If the Seller independently closes a property sale with a Buyer that was sourced by the Agency within a certain number of days after this agreement’s listing period end date, then he or she can still be responsible for any fees this agreement expects to be paid to the Agency. Such a grace period for the listing must be predetermined and agreed upon before the execution of this paperwork occurs. Document the number of days from this list period’s termination or end date where a sale of the property to a Buyer found by the Agency will obligate the Seller to pay the Agency the fee this contract expects.

VI. Commission

(20) Percentage (%) Commission. The amount of money defining the compensation owed to the Agency for the successful sale of the property must be documented. This payment can be calculated as a percent of the total payment submitted by a Buyer for the Seller’s property. If this will be the preferred method to calculate the commission payment of the property sale, select the first checkbox statement of Article VI, then write out the percentage and present it numerically to the contents of the “Percentage (%) Commission” option

(21) Fixed Payment Commission. If the Agency’s commission for brokering the sale will be a fixed payment or a flat payment, then choose the second checkbox statement of Article VI. Once done, supply the exact amount of money that must be paid to the Agency as the commission for a successful close.

(22) Leasing Option. In some cases, the Agency may find a Tenant to lease the concerned property during the listing period. Naturally, since the Seller will gain income as a result of the Agency’s efforts, the Agency will be entitled to payment. Such payment will take the form of a percentage of the total rent amount that will be earned by the Seller for the property by the end of the leasing period. Document this percentage amount in Item A.

(23) Deed Type. Present the type of deed the Seller holds for the concerned property (i.e. Grant Deed, Mortgage Deed, Warranty Deed, etc.).

(24) Participant Approval.

VII. Cooperation With Other Agents And Agencies

(25) Commission Offered. Since the Agency may employ additional Real Estate Agents to sell the property, a brief discussion on the commission amount such Licensee may expect to receive from the Buyer is needed. Utilize the spaces provided in Article VII to establish the percent of the total payment on the concerned property’s sale that will be submitted (from the Buyer) to the Licensee.

(26) Acknowledgment Of Page.

VIII. Disclosed Dual Agency

(27) Allow Disclosed Dual Agency. Many states will allow an Agency to represent the Seller in this agreement as well as the Buyer in another agreement held. If the Seller has agreed that the Agency may act as a Dual Agency and it is legal to do so in the state where the property is located, then select the “Allow” checkbox in Article VIII.

(28) Disclosed Dual Agency Not Allowed. Select the “Not Allow” checkbox if the Agency in this agreement is bound to represent only the Seller when conducting the sale of the concerned property.

IX. Marketing The Property

(29) Advertise The Property. This agreement must be used to give the Agency approval to perform certain actions when selling the property. To this end, a brief list that should be reviewed by the Seller has been provided. Only the actions initialed by the Seller may be considered approved for the Agency to engage in. For instance, if the Seller approves of the Agency running advertisements for the property then the first of these items in Article IX should be initialed by the Seller.

(30) Disclosure Of Street Address. The Seller will need to initial the second statement in Article IX to approve of the Agency listing the street address of the property in any advertisements run for the purpose of selling the property.

(31) Third Party Approval. Some websites will display estimated market values of the property being advertised. To allow this, the Seller must initial the third item. If not, then the Agency may not use any advertising site that uses and displays such information to advertise the Seller’s property.

(32) Multilisting On Property. If the Seller approves of the Agency listing other offers on the property then, he or she must initial the fourth statement presented in Article IX.

(33) Publishing Property Information For The Purpose Of Sale. A variety of media can be used publically and privately to advertise this property. This can create quite a few onlookers and inquiries on the Seller’s property but will aid the Agency’s efforts in finding a successful Buyer. The Seller must initial the fifth statement if he or she wishes to approve of the Agency’s use of electronic or printed media to advertise the property.

(34) Lockbox Approval. The Seller must initial the sixth statement if he or she intends to give the Agency approval to place and use a lockbox on the property (to allow easy access to the property) and agree to hold the Agency harmless from damages, loss, or theft that may occur during the listing period.

(35) Signage On Property. In order for the Agency to place a “For Sale” sign on the property, the Seller must deliver his or her authorization to do so. In order to provide such approval, the Seller must initial the seventh statement of Article IX.

(36) Photographic Services. Any image of the property the Agency wishes to use to advertise its availability must be approved by the Seller. This approval can be displayed through the Seller’s initials. He or she should keep in mind that the Agency will not be held responsible of liable for damages or inconveniences caused by the release of such images. This waiving of liability will be included in the final topic’s language in Article IX.

(37) Page Approval.

XXVII. Governing Law

(38) Court Jurisdiction. The state where the property is located will (in a vast majority of cases) be the Governing Entity that shall enforce this agreement and protect its Participants from each other. Disclose the name of the State that governs this agreement in Article XXVII.

XXIX. Additional Terms And Conditions.

(39) Provisions To Listing Agreement. Only the contents of this paperwork will apply to the Seller and Agency regarding the concerned listing. Review this document in full. If there are any topics, payments, conditions, or disclosures that must be included for this listing agreement to be completely documented, then use the area in Article XXIX to present them. If needed, the title of an attachment with this information may be displayed. Keep in mind any attachment named here must be present and kept with this paperwork before and after it is signed by the Seller and Agency.

XXX. Entire Agreement

(40) Seller’s Signature. The Seller’s intent to adhere to the terms and conditions above must be shown. He or she must sign this contract and present his or her name in print in order to be considered bound by it as well as to benefit from its effect.

(41) Seller’s Signature Date.

(42) Broker’s Signature. The Agency representing the Seller in this agreement must provide a signature as well. This act will need to be performed by the Broker working on behalf of the Agency to honor its agreement with the Seller. The signature and printed name of the Broker must be provided where requested so that the Agency can legally enter this agreement.

(43) Broker Signature Date.