Listing agreement

A listing agreement is the contract between a home seller and a real estate brokerage that authorizes the brokerage to market the property for sale. The agreement specifies what the brokerage will do (marketing, showings, offer review, contract management), how long it has to do it (typically 3 to 6 months), and how the brokerage will be compensated.

How it works: most listing agreements are exclusive right to sell, the seller agrees that the brokerage gets the listing-side commission no matter who finds the buyer, even if the seller produces the buyer themselves. Less common variants include exclusive agency (commission only if the brokerage produces the buyer) and open listings (no exclusivity, multiple brokerages compete). Exclusive right to sell is far and away the most common structure.

Why it matters: post-2024 NAR settlement, the listing agreement covers only the listing-side compensation. Buyer-side compensation is now negotiated separately, either as part of the listing strategy (where the seller offers buyer-side comp to widen the buyer pool) or in individual offers (where buyers ask the seller to cover their agent's compensation as a closing concession). The structural separation is the most material change in residential brokerage in decades.

Common gotcha: most listing agreements include a "carryover" clause, if a buyer the listing agent introduced eventually buys the home within 60 to 180 days of the agreement ending, the listing agent still gets compensated. This protects the brokerage from sellers who tour with the agent's clients and then drop the agent to avoid commission. Reading the carryover clause before signing matters when timing or agent fit is uncertain.