What does the term "listing agreement" refer to in real estate?

The term "listing agreement" specifically refers to a written agreement that a seller enters into with a real estate broker. This document outlines the terms under which the broker will represent the seller's property in the market. It typically covers key aspects such as the listing price, the duration of the agreement, commission rates, and the obligations of both the seller and the broker.

Having a written agreement establishes a formal relationship and provides legal protection for both parties, clarifying expectations and responsibilities. This is crucial in real estate transactions, where clarity and documentation are essential to avoid misunderstandings and ensure compliance with state laws.

While verbal agreements can exist, they lack the enforceability and clarity that a written agreement provides, making the latter the standard practice in the industry. Also, listing agreements are between the broker and the seller, not just clients, which further underscores the importance of the formal, written nature of such agreements. Additionally, listing agreements do not inherently involve agreements that prohibit competing listings; rather, they establish the terms under which the broker will market the property listed.