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The "listing" contract
Several types of listing contracts exist between broker and seller. These
may be defined as:
- Exclusive Right to Sell
In this type of Agreement", the broker is given the exclusive right to
market the property and represents the seller exclusively. However, the
brokerage also offers to co-operate with other brokers and agrees to allow
them to show the property to prospective buyers and offers a share of the
total real estate commission.
- Exclusive Agency
An alternative form, "Exclusive Agency", allows only the broker the right to
sell the property, and no offer of compensation is ever made to another
broker. In that case, the property will never be entered into an MLS.
Naturally, that limits the exposure of the property to only one agency.
- Open Listing
This is an Agreement whereby the property is available for sale by any real
estate professional who can advertise, show, or negotiate the sale. Whoever
first brings an acceptable offer would receive compensation. Real estate
companies will typically require that a written agreement for an open
listing be signed by the seller to ensure the payment of a commission if a
sale should take place.
Although there can be other ways of doing business, a real estate brokerage
usually earns its commission after the real estate broker and a seller enter
into a listing contract and fulfill agreed-upon terms specified within that
contract. The seller's real estate is then *listed* for sale, frequently
with property data entered into a Multiple Listing Service (MLS) in addition
to any other ways of advertising or promoting the sale of the property.
In most of North America, where brokers are members of a national
association (such as NAR in the United States or the Canadian Real Estate
Association), a listing agreement or contract between broker and seller must
include the following: starting and ending dates of the agreement; the price
at which the property will be offered for sale; the amount of compensation
due to the broker and how much, if any, will be offered to a co-operating
broker who may bring a buyer. Without an offer of compensation to a
co-operating broker (co-op percentage or flat fee), the property may not be
advertised in the MLS system.
