Brokerage Contracts
Types of Listing Agreements Explained
The listing agreement type determines when the broker earns a commission and what protection they have. Here are all four types with the key exam distinctions.
The Four Listing Types
Exclusive Right to Sell
The broker earns a commission regardless of who sells the property — even if the owner finds the buyer themselves. The most common listing type.
Exclusive Agency
Only this broker may represent the seller, but the owner retains the right to sell themselves without paying a commission. If any other broker brings a buyer, the listing broker earns a commission.
Open Listing
The seller can list with multiple brokers simultaneously. Only the broker who produces the buyer earns a commission. The owner can also sell themselves without owing any commission.
Net Listing
The seller specifies a net amount they want. The broker keeps anything above that amount as commission. Illegal in many states because of the conflict of interest.
Listing Agreement FAQ for the Exam
In an exclusive right to sell listing, when is the broker entitled to a commission?
When a ready, willing, and able buyer is procured at the listed price and terms. The broker earns the commission even if the owner sells the property themselves to a buyer the owner found independently.
What is the key difference between exclusive right to sell and exclusive agency?
In exclusive right to sell, the broker earns a commission no matter who finds the buyer — even the seller. In exclusive agency, the broker earns a commission unless the seller finds the buyer themselves.
Why is a net listing problematic?
The broker's commission is everything above the seller's net floor. This creates a conflict of interest — the broker may not act in the seller's best interest. Most state licensing laws restrict or prohibit net listings.
What must all valid listing agreements include?
Parties identified, property description, listing price, commission rate or amount, beginning and ending dates (specific expiration date), broker's authority, and signatures. Open-ended listing agreements are prohibited in most states.