Types of Real Estate Listing Contracts

• Three common real estate listing contracts offer varying advantages to the seller and agent. Alistair Berg/Digital Vision/Getty Images

  A real estate listing contract is a formal written agreement between a real estate property owner and a real estate agent or broker. The property owner is the principal and he authorizes the agent to act on his behalf to perform services related to marketing and selling the property for a stated period. A contract also notes the commission or fee to be paid to the agent if a sale is completed.

Open Listing

• An open listing is one of three common types of real estate listing agreements, according to "Real Estate Listing Agreements" overview published by Accelerated Real Estate House Sales. An open listing does not grant exclusive rights to any broker. Instead, a property owner asks brokers to compete to make the sale, with the selling agent getting the commission. A benefit of an open listing is that it is easier for the owner to justify completing a sale himself, if that is the case, since no agency was granted exclusive rights to market and sell the property. No commission is owed if the owner makes the sale. No termination date is listed on an open contract and all other agreements terminate when a property is sold.

Exclusive Agency Listing

• Exclusive agency listings are not overly popular among real estate agents, according to the website Real Estate ABC. An exclusive agency listing gives rights to one listing broker to list and market your house. The agency receives a commission on the sale if an agent from any broker sells the property. Agents sometimes do not like these listings because the owner may complete the sale and the agent earns nothing. This leads to attempts by owners to undermine agents or to work around agents with buyers obtained from the agent's marketing efforts. Real Estate ABC advises sellers to realize listing agents may not be motivated with an exclusive agency listing and often just list a home in the multiple listing service to avoid the risk.

Exclusive Right to Sell Listing

• Both Real Estate ABC and Accelerated Real Estate House Sales point out that exclusive right to sell listings are the most advantageous to real estate brokers and agents. Under this exclusive contract, the agent earns a commission regardless of who sells the property if it is during the contract term of the listing agreement. Of the major listing types, this is the only one in which the property owner cannot make the sale and avoid paying any commission. While this is a detriment to some, a benefit is that the exclusive agent usually feels more pressure to actively market and sell the property during the contracted time frame on the listing. Otherwise, sellers are likely to go elsewhere.