What does a "listing agreement" define?

A listing agreement is a legal contract that establishes the relationship between a property owner and a real estate agent. This contract details the terms under which the agent will provide services to sell or lease the property. It typically outlines the responsibilities of both parties, including the agent's obligations to market the property, negotiate offers, and provide advice based on market conditions. In return, the property owner agrees to compensate the agent with a commission from the sale or lease of the property.

This contract is crucial as it formalizes the agreement and sets expectations, which helps protect the interests of both the property owner and the real estate professional. A well-defined listing agreement can also include specifics such as the duration of the contract, the listing price, and any other arrangements that may impact the sale process. Understanding the importance of this document is vital in real estate transactions, making it a foundational element in the practice of real estate.