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12.2 Types of Listing Agreements
12.2 Types of Listing Agreement
Listing agreements vary by who is represented (seller/landlord vs. buyer/tenant) and how compensation is earned (exclusive vs. open, etc.).
Exhibit 12.1 — Types of Listing Agreements
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Owner Listings (Seller/Landlord Representation)
Exclusive right-to-sell (or lease)
- Most widely used owner agreement.
- Seller contracts with one broker; broker earns commission if the property transfers during the listing period—regardless of who procures the buyer/tenant.
- Often must be in writing and must have an expiration date (varies by state).
Exclusive agency
- One broker is authorized, but the owner retains the right to sell without broker assistance and owe no commission.
- If anyone other than the owner is procuring cause, the broker earns the commission.
- Generally must have an expiration date.
Open listing
- Non-exclusive; owner may list with multiple brokers.
- The broker who is the first to perform (usually procuring cause) earns the commission.
- If no broker is procuring cause, no commission is owed.
Net listing
- Owner sets a minimum net amount; broker keeps anything above that as commission.
- Generally discouraged and illegal in many states due to conflict of interest concerns.
Buyer/Tenant Representation + Other Agreements
Buyer and tenant agency agreements
- Create a fiduciary relationship with the buyer/tenant (similar to seller listings).
- Often structured as exclusive, exclusive agency, or open (exclusive is most common).
- Compensation terms are defined in the agreement (may be paid by seller, buyer, or both depending on circumstances).
Transaction broker agreement
- Non-agency relationship (no fiduciary duties to either party).
- Still a binding agreement to facilitate the transaction for compensation.
Multiple listing (MLS)
- Not a separate listing contract—typically a provision authorizing entry into an MLS.
- Enables cooperation with other member brokers in exchange for a share of commission.
Limited services agreement
- Written agreement for a limited, specified list of services (not full service).
- Must disclose limited service role and list what will and will not be provided.
Quick Check-Ins (Self-Test)
1) Under an exclusive right-to-sell listing, the broker earns a commission if the property transfers during the listing period:
- A. Only if the broker personally finds the buyer
- B. Only if another broker finds the buyer
- C. Regardless of who procures the buyer
- D. Only if the owner does not participate
Show Answer
Correct: C. Under exclusive right-to-sell, commission is owed if the property transfers during the term regardless of procuring cause.
2) Which listing type is most associated with commission disputes and offers no assurance of compensation for marketing efforts?
- A. Exclusive right-to-sell
- B. Open listing
- C. Exclusive buyer agency
- D. Limited services agreement
Show Answer
Correct: B. Open listings are non-exclusive and commonly create procuring-cause disputes.