Imagine signing a listing agreement with a Realtor to sell your home and things don’t go as planned.
Showings are slow.
Communication drops.
And you start thinking about switching agents.
Then you look at the contract and realize getting out of it may not be as easy as you thought.
That’s when many sellers find out the hard way what they actually agreed to.
I’ve walked many sellers through their listing agreements, and I want to do the same with you.
This guide explains what a listing agreement is, how long it usually lasts, the terms you should pay close attention to, and what you may want to negotiate before signing.
What is a listing agreement?
A listing agreement is a contract between a home seller and a real estate brokerage that sets the terms of the relationship and allows the brokerage to market the property for sale.
It outlines important details such as how long the agreement lasts, how the brokerage is compensated, and the responsibilities of both the seller and brokerage.
The seller works directly with a listing agent, but the agreement is with the agent’s brokerage.
Listing agreement vs. listing contract vs. Realtor contract
Listing agreement and listing contract mean the same thing when you’re selling a home.
Both refer to the contract between a seller and the real estate brokerage representing them in the sale.
“Realtor contract” is a more general term people use for different types of real estate agreements.
It can refer to a seller’s listing agreement, but it can also mean a buyer-broker agreement, which is the contract a buyer signs when hiring an agent to represent them.
How long does a listing agreement last?
Most listing agreements last 3 to 6 months, but there isn’t a standard length that every seller has to agree to.
The length of the contract is called the listing term.
Some agreements may be shorter or longer depending on the property, market, and brokerage.
You and the brokerage can agree to extend the agreement if it expires before your home sells.
What to look for in a listing agreement before signing
There are several terms in a listing agreement that are important to understand.
Here’s what to pay closest attention to.
Type of listing agreement
The type of listing agreement you sign can affect when the brokerage is entitled to a commission.
An exclusive right-to-sell agreement is commonly used when hiring a listing agent.
With this type of agreement, the brokerage is typically entitled to a commission if your home sells during the listing term.
Other types of listing agreements work differently, so know which type you’re signing.
Listing term, expiration, and renewal
Your listing agreement should state when the contract starts and when it expires.
Some agreements end on the expiration date unless you and the brokerage agree to extend them.
Others may include language that automatically renews the agreement unless you give notice by a certain date.
Before signing, check the expiration date and any terms that could extend or renew the agreement.
Commission and when it’s owed
Most sellers focus on the real estate agent commission when signing the contract.
But you also need to understand what triggers your obligation to pay it.
Look for:
- The commission amount or how it will be calculated
- The conditions that cause you to owe the commission
- What happens if you cancel the agreement
- What happens if you find the buyer yourself
- Any additional fees you could be charged.
Before signing, you should be able to answer one question:
In what situations would I owe the brokerage money, and how much?
Cancellation and termination
The cancellation terms explain what happens if you want to end the listing agreement before it expires.
Don’t assume you can cancel without a fee or other financial obligation.
Look for:
- Whether you’re allowed to cancel the agreement early
- How much notice you need to give before canceling
- How the cancellation notice must be delivered
- Any cancellation fees or other costs you could owe.
You should know exactly what it takes to end the agreement and what it could cost you before signing.
Protection period
A protection period, sometimes called a tail clause, can require you to pay the brokerage a commission after your contract expires.
It applies when a buyer who was introduced to your home during the listing term purchases it within a certain period afterward.
Look for:
- How long the protection period lasts
- Which buyers are covered
- Whether the brokerage must give you a written list of those buyers
- What happens if you list your home with another brokerage during the protection period.
A protection period isn’t necessarily a bad thing.
But you should understand exactly when it applies so you’re not surprised by a commission obligation after your contract has expired.
Broker and agent responsibilities
The contract should explain what the brokerage agrees to do when representing you in the sale.
Review the services that are included and any responsibilities assigned to the brokerage or listing agent.
These may include marketing the property, submitting it to the MLS, presenting offers, and helping manage the transaction.
Don’t assume everything discussed during the listing presentation is included.
If the agent made a specific promise that’s important to you, ask whether it should be included in writing before you sign.
Seller responsibilities
The brokerage isn’t the only one agreeing to certain responsibilities.
The contract also spells out what you’re expected to do while your home is listed.
This can include:
- Providing accurate information about the property and completing required disclosures
- Allowing access for showings, inspections, and an appraisal
- Agreeing to terms for signs, lockboxes, and showing access.
Pay close attention to anything that could affect how you live in or sell your home.
For example, if you don’t want a lockbox or need advance notice before showings, make sure the terms you’re agreeing to don’t conflict with that.
Dual agency
Your listing agreement may include language allowing the brokerage to represent both you and the buyer in the same transaction.
This is called dual agency.
This arrangement creates an inherent conflict because the brokerage has responsibilities to both the seller and buyer.
Before signing, look at:
- Whether you’re consenting to dual agency in advance
- Whether the same agent could represent both you and the buyer
- What limitations apply if dual agency occurs.
Don’t treat the dual agency language as another box to check.
Make sure you understand what you’re agreeing to and whether you’re comfortable with it before giving your consent.
Excluded buyers
If you already know someone who might buy your home, check whether the listing agreement allows you to exclude that person from triggering a commission.
This might be a tenant, neighbor, friend, family member, or someone else who expressed interest before you hired the agent.
Any exclusion should be clearly documented in the contract.
Also check whether the exclusion eliminates the commission entirely or whether a commission could still apply if the brokerage is involved in the sale.
Addressing this before you put pen to paper can help prevent a commission dispute later.
What happens after you sign?
Signing the agreement doesn’t necessarily mean your home goes on the market right away.
Once the contract takes effect, your agent can help you prepare based on when you plan to list.
There’s nothing wrong with contacting a Realtor several months before you plan to sell.
Starting that early gives your agent time to help you figure out what needs to be done before listing and what probably isn’t worth doing.
They can also recommend service professionals, help coordinate the work, and keep an eye on your local market as your target date gets closer.
Things usually move faster if you’re planning to sell soon.
Your agent can start working with you on the list price, photos, disclosures, and the marketing plan so your home is ready to hit the market.
What can you negotiate before signing?
The terms in a listing agreement aren’t necessarily set in stone.
You can ask for changes before you sign.
Here are three items worth discussing with your agent.
Length of the agreement
It’s common for a listing agent to start with a six-month term when preparing the contract.
But that doesn’t mean you should automatically agree to six months.
I recommend matching the length of the agreement to a realistic timeline for your sale.
For example, let’s say you’re signing the contract about 60 days before you plan to list.
That’s roughly four months from signing to closing if your agent expects your home to take about 30 days to sell and another 30 days to close.
In that situation, ask for a four-month term instead of agreeing to six.
Your asking price, the condition of your home, and market conditions can all affect how long your home takes to sell.
So the term should give your agent a reasonable amount of time to get the job done.
But there’s no reason to commit yourself much longer than your expected timeline without a good reason.
Right to cancel
Sometimes the relationship with a real estate agent doesn’t work out.
You don’t want to find that out and then realize your listing contract keeps you stuck for several more months.
That’s why you should negotiate the right to cancel at any time without paying a commission just for ending the agreement.
We require the agents we match with sellers to offer this type of flexibility.
It gives you the ability to move on if you’re unhappy with the service you’re receiving instead of waiting for the contract to expire.
It also gives your agent a reason to keep earning your business instead of relying on the contract to keep you there.
You should also understand whether any obligations can continue after cancellation, such as a protection period for certain buyers.
So I recommend making the right to cancel one of the questions you ask a Realtor before signing.
Dual agency
Don’t overlook adding a term that prevents your listing agent from also representing the buyer.
This doesn’t necessarily prevent another agent at the same brokerage from representing the buyer.
But it does prevent the agent you hired from representing both sides of your transaction.
A verbal agreement isn’t enough.
Have the restriction added to the listing contract in writing.
The language can be as simple as: “[Agent Name] will not represent the buyer in the purchase of this property.”
That keeps your listing agent on your side of the transaction when it’s time to negotiate.
Final thoughts
A listing agreement isn’t just another piece of paperwork to sign when selling your house.
It determines what you’re committing to and what happens if the relationship with your agent doesn’t work out.
Understand the terms and negotiate anything you’re not comfortable with before you sign.
If you haven’t hired an agent yet, SoldNest can help.
We match sellers with proven listing agents who meet our vetting standards and won’t lock you into a listing agreement you can’t cancel.
You can get matched with a listing agent to see which agents we recommend in your area.
