The Listing Agreement in California is essentially an EMPLOYMENT contract between the Seller and the Listing Brokerage. The Brokerage, represented by the Listing Agent, is hired for a specific period of time — the length of the Listing Agreement — to provide listing support, marketing advice, advertising, showing, and all the other aspects of selling a home, usually on an exclusive basis — for the Seller. The Listing Agreement also specifies compensation for this service, usually in the form of a percentage of the Sales Price. The amount that should be shared with the Buyer’s Agent is also spelled out in the contract in most cases. The agreed upon starting price, or in some cases, starting price range, is also documented so that everyone is in agreement.
The Listing Agreement spells out the roles and responsibilities of each party. For example, the Agent and the Brokerage do NOT set the listing price — they can advise the Seller, but it is ultimately the Seller’s decision as to what market position to establish and when to change it. The Agent must use their expertise and skills on behalf of the Seller in a professional and knowledgable manner.
There are special Listing agreements for different types of properties, such as income property, mobile homes, or homes that are in foreclosure, but they all have the common elements of spelling out the period of performance of the listing, the price to be set at the start, the compensation to be paid, and the roles and responsibilities of all parties.
The Listing Agreement also specifies that the Agent/Brokerage will have a Fiduciary duty to the Seller — that is, to place the Seller’s financial interest above their own — and to have honest and fair dealings. The text of the Listing Agreement was obviously drafted by Lawyers, but it is really easy to understand.
Any changes to the price after the initial listing agreement is signed will be documented via a Modification of Terms form, again, so that all parties are clearly in agreement and there are no misunderstandings later.
IF YOU’D LIKE TO GET A COPY OF A SAMPLE LISTING AGREEMENT, PLEASE CLICK HERE AND ONE WILL BE SENT TO YOU VIA EMAIL.
(PLEASE, NO AGENT REQUESTS)