What defines a listing agreement?

A listing agreement is best defined as a legally binding document that details the terms of marketing and listing a property for sale. This type of contract is established between a property owner and a real estate agent, providing the agent with the authority to represent the owner in the sale of the property.

The agreement typically outlines key components such as the listing price, the duration of the listing, the responsibilities of the agent, and the compensation structure for the agent. By laying out these terms clearly, the listing agreement ensures that both parties have a mutual understanding and legal framework to operate under, which is essential for effective representation in real estate transactions.

This definition distinguishes listing agreements from options that refer to purchasing contracts, financial agreements solely about commissions, or temporary leasing contracts, all of which serve different purposes in real estate.