What is a "listing agreement"?

A listing agreement is a contract that establishes the terms of the relationship between a property owner and a real estate agent. This document typically outlines important details such as the duration of the agreement, the commission the agent will receive upon the sale of the property, and the responsibilities of both parties. It is a crucial element in the real estate process, as it empowers the agent to market and sell the property on behalf of the owner, while also ensuring that the owner understands the conditions under which the agent will operate.

The definition of a listing agreement distinguishes it clearly from other concepts in real estate transactions, such as an offer to purchase, which is a separate document initiated by a buyer, or a deed, which is a legal instrument that actually transfers ownership of a property. Additionally, a notice of intention to sell does not involve the contractual obligations or agency relationship created by a listing agreement. Understanding the specific purpose and functions of a listing agreement is essential for both real estate professionals and property owners navigating the buying and selling process.