What is a real estate listing form?
A real estate listing agreement form establishes a contract between a property owner and a real estate broker. It sets out the terms whereby a property owner authorizes a real estate broker to sell a property. It spells out the owner’s terms, and the seller’s commission will pay the agent for the transaction.
In some ways, a real estate listing agreement form is more like an employment contract than a real estate contract. The seller or property owner hires the agent to represent them and find a buyer for their property.
In this article, the following points are explained:
The importance of a listing agreement in real estate
A real estate listing form is an essential document. It establishes a legally binding contract between a seller and a real estate agent for a certain period. It protects both parties as it spells out what each can and can’t do. It describes the liabilities and responsibilities each has for the duration of the contract.
There are three types of real estate listing agreements:
- An open listing is a non-exclusive arrangement that uses multiple estate agents. The agent who sells the property will receive the commission. Should the seller find a buyer on their no commission is paid.
- An exclusive agency listing in which the property seller authorizes one estate agent to sell their property. However, the seller is not obliged to pay the agent a commission if the seller finds a buyer on their own.
- An exclusive right-to-sell agreement whereby a property owner grants the agent exclusive rights to a commission, regardless of who sells the property (i.e., another agent or sub-agent).
Listing agreement forms are not standard and may vary significantly from one real estate broker to the next. However, they must all contain the following vital information:
- A detailed and accurate description of the property
- The price listed for the property
- All financial terms that will govern the sale of the property
- Any non-realty items that may form part of the sale
- Any known defects of the property as regards the:
- Air conditioning and heating
- What type of advertising will be used, and who will be liable for marketing costs?
Because we know it’s hard to come up with a template on your own, check out our template for a real estate listing agreement form and use it for yourself or get inspired.
The reason for commercial real estate listing agreement forms
A commercial real estate listing agreement form establishes a binding legal contract for a stipulated period between a seller and an estate agent. The seller will be the owner of a commercial property. They will engage the marketing services and expertise of a commercial agent or broker to sell that commercial property. The retail broker’s commission will generally be higher than that for residential properties.
A specialized commercial broker will look at the best use of the commercial property while searching for buyers that will qualify. Getting the best price will usually be determined by the property’s location, the size of its land area, and past revenue generated.
A commercial listing agreement usually lasts for 12 months. This is considered a realistic period for the agent to market the property, negotiate with a qualified seller/s, and close the sale. The listing agreement is often extended to 180 days if it seems likely that a deal might be pending with a prospective buyer.
It is essential that a commercial real estate listing agreement is adequately reviewed and negotiated, preferably with legal input. All parties to the commercial listing agreement must be fully aware of the obligations and rights that a commercial listing agreement entails. Listing agreements aren’t standard and can be negotiated in many different ways.
There are three standard types of commercial listing agreement forms:
- The most common is the exclusive right-to-sell agreement. This entitles the listing broker to a commission even if the owner sells the property without his/her involvement.
- The 2nd type of commercial listing agreement form is the net listing agreement. This agreement specifies the broker’s commission as the amount by which the price paid for the property exceeds the price listed in the commercial listing agreement.
- The 3rd type, and the least popular, is the open listing agreement, also known as the non-exclusive listing agreement. This type of agreement allows the owner to list the commercial property with several brokers. The first broker who sells the property gets the commission.
To be legally binding, commercial real estate listing agreements must contain specific statutory requirements. A legal expert should be involved in the process. The following points should be borne in mind when a commercial real estate listing agreement form is drawn up:
- Which is the best type of listing agreement for this specific property and type of sale?
- Because of that, what would be the best duration of the commercial listing agreement?
- Which events or conditions would entitle the agent to compensation?
- If applicable, what should be the length of an override period?
- Which circumstances would allow either the seller or the broker to terminate or cancel the listing agreement?
- All parties must pay close attention to the language used in any buying agreement that applies to the commission to the agent. The language used must be completely compatible with all the terms of the commercial listing agreement.
To ensure that a commercial listing agreement is valid, the following statutory requirements must be met:
- It must be a written document.
- Brokers must have a signed listing agreement to market the property.
- The written listing agreement must contain:
- A stipulated expiration date
- An accurate description of the property
- The sale price
- Any terms specified by the seller
- The amount of the agent’s commission, or how it will be calculated
- Events and/or conditions that entitle the agent to a commission.
- When, if applicable, the override clause will not apply.
The need of a real estate listing agreement cancellation form
A real estate listing agreement cancellation form is used to cancel the previously entered agreement between a seller and a broker. It may present problems, as some agents may put up a fight! However, these are some standard steps to follow:
- The seller must read their agreement with the agent. It may contain an option to cancel, or it might have expired already. Ideally, the cancellation terms should be discussed and spelled out when the real estate listing agreement form or the commercial real estate listing agreement form are first signed.
- If it states that the seller is liable for the agent’s commission, they must talk to the agent. If they also want to cancel, it would simplify matters.
- The seller may have to negotiate an acceptable settlement with the agent if they are liable for cancellation fees or a protection clause.
- The seller might have more substantial grounds for canceling if the listing agent hasn’t done an excellent job. Poor marketing, no online exposure, poor communication, poor photographs used, or unethical behavior may be persuasive reasons for drawing up a real estate listing agreement cancellation form.
- A listing agreement that doesn’t provide a definite expiration date may be terminable at will.
Better real estate listing organization with an app
In the real estate industry, there are many forms and other types of documents involved in selling or renting a property. These documents can take up a lot of storage space if they are paper-based documents. To make it easier to manage your forms, you should switch to digital document management.
A digital app like Lumiform will help you do just that. With the powerful desktop software and app, you can convert your paper documents to a digital format in just a few steps. Plus, you’ll speed up the process of creating, writing, and assembling documents for you and your entire team. But that’s not the only advantage Lumiform offers in the real estate industry:
- Create an unlimited number of digital templates with the form builder. Lumiform also allows you to convert existing real estate documents into a digital form.
- Property forms can also be scheduled, notifications are sent to your mobile devices.
- Get started digitally right away by accessing over 12,000 free downloadable templates. You can also edit these to your liking.
- Experience real-time data collection and perform detailed analytics with your collected data.
- Create reports automatically when you conduct property visits and inspections or record data from clients. Then send them immediately to your clients.
- Save all your digital documents securely in the cloud, preventing unauthorized people from gaining access.
Try Lumiform for free