REAL ESTATE AGENT / DEFINITIONS

What is a Listing in Real Estate?

When it comes to the real estate industry, one term you'll often come across is "listing". But what is a listing in real estate?

Definition

A real estate listing refers to a property that is for sale, lease, or rent and is represented by a real estate agent or broker.

What is a Listing Agreement?

In the broadest sense, a listing is an agreement between a property owner and a real estate broker. This agreement authorizes the broker to act on behalf of the owner in the sale or lease of a property.

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Types of Listings Agreements

There are several types of listing agreements, each with its own specific terms and conditions.

Open Listing

An open listing allows any number of brokers to try and sell the property. The broker who brings the buyer gets the commission, while the owner can also sell the property independently.

Example: You want to sell your house. You sign open listing agreements with multiple brokers. Whoever sells your home first earns the commission.

Exclusive Agency Listing

This agreement means only one broker has the right to sell the property, but if the owner finds a buyer independently, the broker is not paid a commission.

Example: You appoint a broker to sell your property. If you end up finding a buyer yourself, you don't owe the broker any commission.

Exclusive Right-to-Sell Listing

Here, one broker is given the exclusive right to sell the property. Regardless of who finds the buyer, the broker receives a commission.

Example: You hire a broker to sell your home. Even if you find a buyer on your own, the broker still gets paid.

Multiple Listing

This is a type of exclusive listing where the property details are shared with all members of a multiple listing service (MLS). Any agent can sell the property and the commission is split between the listing and selling agents.

Example: Your property is listed with an MLS. Any member agent can sell your property and share the commission with the listing broker.

Net Listing

In a net listing, the seller sets a minimum price for the property. Anything over that amount is kept by the broker as commission.

Example: You want at least $200,000 for your home. The broker sells it for $220,000 and keeps the extra $20,000 as commission.

Guaranteed Sale Agreement

This agreement allows a broker to buy a property at a predetermined price if it doesn't sell within a certain timeframe.

Buyer Agency Agreement

This agreement outlines the terms under which a broker will act on behalf of a buyer in a property transaction.

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Buyer Agency Agreements

Types

  • Exclusive Buyer Agency Agreement - The buyer works exclusively with one broker.
  • Exclusive Agency Buyer Agreement - The buyer works with one broker, but if they find a property independently, they don't have to pay the broker.
  • Open Buyer Agency Agreement - The buyer can work with multiple brokers and only pays the broker who finds the property they purchase.

Information Included in Buyer Agency Agreements


  • The Term of the Agreement - How long the agreement is in effect.
  • General Characters of the property being sought by the buyer - Details about the type of property the buyer is looking for.
  • A list of the broker's duties during the term of the agreement - What the broker is expected to do under the agreement.
  • Compensation and Method of Payment - How much and how the broker will be paid.

Whether you're a buyer, seller, or aspiring real estate agent, understanding these terms can help you navigate the real estate market more effectively.

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How to Create a Listing

Creating a real estate listing is a crucial step for any real estate agent looking to sell a residential real estate property (or any other type for that matter). Here's a basic guide to help you through the process. If you have any specific questions, remember you can speak to your broker for guidance.

Step 1). Establish an Agency Relationship

As a real estate agent, your first step will be to establish an agency relationship with the seller. This relationship is typically established through a listing agreement, which outlines your responsibilities and duties to the client.

Step 2). Gather Information about the Property

Visit the property and gather all necessary information. This includes details about the property's size, number of rooms, unique features, and any recent renovations or upgrades.

Step 3). Set a Price

After gathering all the information, set a price for the property. To do this, you can compare similar properties in the area, consider the condition of the property, and take into account any price changes in the market.

Step 4). Prepare the Listing

Now, it's time to prepare the listing. Include all the information gathered about the property and make sure to highlight its selling points to attract potential buyers. Photos and videos are crucial here; they allow buyers to visualize the property before visiting it. This is why it's important to choose the best camera for real estate photography.

Step 5). Post the Listing

Once the listing is prepared, post it on various platforms where potential buyers are likely to see it. This could include your company's website, national association websites, or other real estate listing sites.

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How to Terminate a Listing

There may come a time when you or your client want to terminate a listing. The process can vary depending on the specifics of the contract, but here's a general guide.

Step 1). Review the Listing Agreement

The first step in terminating a listing is to review the agreement you have with the seller. This document should outline the terms and conditions under which the listing can be terminated.

Step 2). Communicate with the Seller

If you're the one initiating the termination, communicate your intentions clearly with the seller. Explain your reasons and reassure them that their best interests remain a priority.

Step 3). Prepare a Termination Agreement

Once both parties agree to terminate the listing, prepare a termination agreement. This document should state that all obligations under the original listing agreement are now void.

Step 4). Submit the Termination Agreement

Submit the termination agreement to either the broker or your company for approval. Once approved, provide a copy to the seller.

Step 5). Remove the Listing

Remove the property from all platforms where it was listed. This signals to potential buyers that the property is no longer available for sale.

Terminating a listing is a serious matter and should not be taken lightly. It's always advised to consult with your broker if you're unsure about any part of the process.

As real estate agents and REALTORS®, it's our duty to ensure the best outcome for our clients, whether their properties are sold or removed from the market.

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