What is a listing agreement in real estate?

A listing agreement in real estate is fundamentally a contract that establishes the relationship between a property owner and a broker. This agreement authorizes the broker to represent the property owner in the sale or leasing of their property. Through this contractual relationship, the property owner grants the broker specific rights to market the property, handle negotiations, and facilitate the sale transaction on their behalf.

The listing agreement also typically outlines key details such as the listing price, duration of the agreement, the commission to be paid to the broker, and any terms related to the marketing and showing of the property. This formal arrangement ensures that both parties understand their roles and responsibilities, which is essential for a smooth real estate transaction.