Listing Contract Law and Legal Definition
In the context of real property law, a listing contract governs the terms of the sale of real property by a third party real estate agency or broker. A listing contract may cover issues, among others, such as the price and terms of sale, broker's commission, agency duties of a listing agent, whether or not the property will be listed with the local MLS (multiple listing service), lockbox use, and resolution of disputes.
* Exclusive right to sell: Regardless of who locates the buyer, the seller must pay the brokerage a commission if, by the expiration date in the listing contract, the real estate is sold. Also, the seller cannot list the property with any other broker until the listing expires with the property unsold. Brokers who are realtors and, thus, are members of NAR are obliged to enter the property into the local MLS system and offer compensation to co-operating brokers.
* Exclusive Agency: The seller can only list the property with one brokerage unless the listing contract expires and the property remains unsold. The property will not be listed in the MLS. The seller must pay the broker a commission if the real estate is sold to a buyer obtained through that brokerage. If the seller locates the buyer him/herself, the seller does not have to pay a commission.
* Open Agency: In open agency listings, the seller may list the property with more than one brokerage. The seller must pay a commission only to the brokerage which secures the buyer for the real estate. Typically, if the seller finds the buyer him/herself, the seller does not have to pay a commission.