Definition
A listing in the context of real estate is a written engagement contract between a principal (usually the property owner) and an agent (often a broker). This contract authorizes the agent to perform specified services, typically involving the marketing and sale of the principal’s property. The term can also refer to the properties themselves that are recorded for sale by a broker who has been authorized by the owner to sell the property.
Examples
Residential Listing
A homeowner enters into a listing agreement with a real estate broker to sell their house. The broker lists the house on various platforms, markets it to potential buyers, and negotiates the sale on behalf of the homeowner.
Commercial Listing
A business owner contracts with a commercial real estate broker to list their office building for sale. The broker networks with potential buyers, negotiates sale terms, and facilitates the sale process.
Exclusive Right to Sell Listing
In this agreement, the property owner grants one broker the exclusive rights to earn a commission if the property sells within the specified period, regardless of who finds the buyer.
Open Listing
This is a non-exclusive agreement allowing multiple brokers to list the property, with only the broker who successfully brings in a buyer earning a commission.
Frequently Asked Questions (FAQs)
What is a listing agreement?
A listing agreement is a legal contract between a property owner and a real estate broker authorizing the broker to assist in selling or leasing the property.
How long does a typical listing agreement last?
The duration varies but typically ranges from three to six months. It can be longer or shorter depending on the agreement between the principal and the agent.
Can a listing agreement be terminated early?
Yes, but the terms and conditions for early termination should be specified in the contract. Often, there may be penalties or fees for early termination.
What is the difference between an exclusive agency listing and an exclusive right to sell listing?
- Exclusive Agency Listing: The owner retains the right to sell the property independently without paying a commission to the broker.
- Exclusive Right to Sell Listing: The broker earns a commission regardless of who sells the property during the listing period.
What is a multiple listing service (MLS)?
An MLS is a database managed by real estate professionals that provides comprehensive information about properties for sale, facilitating cooperation among brokers.
- Exclusive Agency Listing: A type of listing where the owner reserves the right to sell the property independently but agrees to work exclusively with one broker.
- Exclusive Right to Sell Listing: An agreement where one broker is granted the exclusive right to earn a commission if the property sells, regardless of who finds the buyer.
- Multiple Listing Service (MLS): A cooperative system allowing brokers to share property listings.
- Open Listing: A non-exclusive listing giving multiple brokers the right to sell the property, with only the one who successfully brings a buyer earning a commission.
Online References
Suggested Books for Further Studies
- “The Language of Real Estate” by John W. Reilly
- “Your First Year in Real Estate” by Dirk Zeller
- “Real Estate Principles: A Value Approach” by David C. Ling and Wayne R. Archer
- “Modern Real Estate Practice” by Fillmore W. Galaty, Wellington J. Allaway, and Robert C. Kyle
Fundamentals of Listing: Real Estate Basics Quiz
### What is a listing in real estate?
- [x] A written engagement contract between a principal and an agent for property-related services.
- [ ] A verbal agreement to sell property.
- [ ] A type of property insurance.
- [ ] A government property database.
> **Explanation:** A listing is a formal, written contract between a property owner and an agent/broker to facilitate the selling or leasing of property.
### What is an exclusive right to sell listing?
- [x] An agreement where one broker earns a commission if the property sells, no matter who finds the buyer.
- [ ] An open listing where multiple brokers can sell.
- [ ] A listing where the owner pays no commissions.
- [ ] A government-imposed sales contract.
> **Explanation:** An exclusive right to sell listing grants one broker the right to earn a commission regardless of who sells the property.
### Can a homeowner sell their property under an exclusive agency listing without owing a commission?
- [x] Yes, if the homeowner sells the property themselves.
- [ ] No, the broker always gets a commission.
- [ ] Only if they sell it to a family member.
- [ ] Only under a commercial license.
> **Explanation:** Under an exclusive agency listing, the homeowner retains the right to sell the property independently without paying the broker a commission.
### What does MLS stand for in real estate?
- [x] Multiple Listing Service
- [ ] Mortgage Lending Service
- [ ] Maximum Listing Sale
- [ ] Minor Listing Servitude
> **Explanation:** MLS stands for Multiple Listing Service, a cooperative system that allows brokers to share property listings.
### What is the primary benefit of an exclusive right to sell listing for brokers?
- [x] Ensures the broker gets a commission if the property sells.
- [ ] Allows the broker to work part-time.
- [ ] Easy termination of the agreement.
- [ ] No marketing required.
> **Explanation:** The primary benefit of an exclusive right to sell listing for brokers is that it ensures they receive a commission if the property sells during the listing period.
### Can multiple brokers list the same property in an open listing?
- [x] Yes, with only the successful broker receiving a commission.
- [ ] No, only one broker at a time.
- [ ] Only if the property is commercial.
- [ ] Only in rural areas.
> **Explanation:** In an open listing, multiple brokers can list the property, but only the one who successfully finds a buyer will receive a commission.
### How long do listing agreements typically last?
- [x] Three to six months
- [ ] One month
- [ ] One to two years
- [ ] Indefinitely
> **Explanation:** Listing agreements typically last from three to six months, although they can be adjusted based on mutual agreement of the contracting parties.
### What happens if the property doesn't sell before the listing agreement expires?
- [x] The owner may renew the listing or choose a new broker.
- [ ] The property must be sold immediately.
- [ ] The broker gets a termination fee.
- [ ] The agreement is binding indefinitely.
> **Explanation:** If the property doesn’t sell before the listing agreement expires, the owner may renew the listing agreement or opt to hire a new broker.
### What is a key characteristic of a listing agreement?
- [x] It is a legal contract that specifies terms for selling property.
- [ ] It is an informal handshake agreement.
- [ ] It avoids commissions completely.
- [ ] It is only applicable for rental properties.
> **Explanation:** A key characteristic of a listing agreement is that it is a legal contract detailing the terms and conditions for selling the property.
### Why would a property owner choose an exclusive agency listing?
- [x] To save on broker commissions if they find a buyer themselves.
- [ ] To ensure multiple brokers sell the property.
- [ ] To guarantee a sale price.
- [ ] To qualify for a bank loan.
> **Explanation:** A property owner might choose an exclusive agency listing to potentially save on broker commissions if they find a buyer themselves.
Thank you for studying our detailed entry on listings in real estate and attempting the associated quiz. Keep building your real estate knowledge!
