In real estate, listings are properties that an owner has placed on the market through a signed contract with a licensed broker. That contract, called a listing agreement, authorizes the broker to market the home, sets the commission, and controls what happens if the owner finds a buyer independently. Everything a buyer sees on Zillow, Realtor.com, or an agent’s website traces back to one of these agreements.
What a Listing Agreement Actually Does
Signing a listing agreement creates a formal agency relationship. The broker becomes the seller’s agent and takes on fiduciary duties of loyalty, confidentiality, and pursuing the best price and terms available.1National Association of REALTORS®. Consumer Guide: Agency and Non-Agency Relationships In return, the seller takes on obligations spelled out in the contract.
A standard listing agreement covers:
- The full legal names of every titled owner and the property’s legal description.
- The list price the broker will advertise. Sellers can adjust it later, but the opening figure anchors the marketing plan.
- The commission rate: a percentage or flat fee the listing broker earns when the property sells.
- The contract duration, often around six months, giving the broker time to find a buyer.
- Disclosure of known defects, easements, liens, and other encumbrances. Omitting them invites legal trouble later.
Most of these forms are standardized by a state or regional real estate commission. Once signed, the agreement binds both sides for the full term.
The Five Types of Listing Agreements
The type of agreement you sign determines when the broker gets paid and how aggressively they’ll market the property. Some give the broker ironclad protection; others leave the seller with more flexibility and the broker with less incentive.
Exclusive Right to Sell
This is the most common arrangement by a wide margin. The broker earns a commission whenever the property sells during the contract term, no matter who finds the buyer. If the owner’s cousin walks up and makes a full-price offer, the broker still collects. Because the commission is guaranteed, brokers tend to invest heavily in professional photos, advertising, open houses, and MLS exposure.
Exclusive Agency
Here, one broker is the seller’s sole representative, but the seller keeps the right to find a buyer on their own without owing a commission. If a neighbor buys the home with no agent involved, nothing is owed. The trade-off is that brokers generally spend less on marketing when they know the seller could undercut them, so the property may get less attention.
Open Listing
An open listing is the least restrictive setup. The seller can list with multiple brokers at once, and only the broker who actually produces the buyer earns a commission. If the seller finds the buyer, no one gets paid. In practice, no single broker has enough stake in the outcome to market the property seriously.
Net Listing
In a net listing, the seller names a minimum amount they want to walk away with, and the broker keeps anything above that number as their fee. This creates a direct conflict with the broker’s duty to the seller, because the broker profits most by selling for as much over the floor as possible rather than at the true market peak. Most states ban net listings for that reason. In the few states that still allow them, they are widely considered risky.
Pocket Listings
A pocket listing never hits the public MLS. The broker markets the property quietly through personal contacts. Some sellers want this for privacy, but fewer buyers typically means less competition and a lower sale price. Fair housing advocates have also raised concerns that keeping listings off the public market makes it easier to steer properties toward or away from buyers based on protected characteristics, which the Fair Housing Act prohibits.2Office of the Law Revision Counsel. 42 USC 3604 – Discrimination in the Sale or Rental of Housing
How Commission Works After the 2024 NAR Settlement
For decades, the standard model was simple. The seller agreed to a total commission, often 5% to 6%, and the listing broker split it with whoever represented the buyer. The seller effectively paid both agents. That changed on August 17, 2024, when new rules from the National Association of REALTORS settlement took effect as part of nationwide litigation over broker commissions.3National Association of REALTORS®. Consumer Guide to Written Buyer Agreements
The practical shifts for anyone signing a listing today:
- Listing brokers can no longer advertise a buyer’s agent commission through the MLS. The fields for cooperative compensation were removed.
- Buyers negotiate their own agent’s fee directly with that agent. As of late 2025, average buyer’s agent commissions ran around 2.4% to 2.5%, with variation by market and price range.
- Before touring a home with an agent, buyers must sign a written agreement spelling out how that agent will be paid. Walking into an open house alone does not trigger this.3National Association of REALTORS®. Consumer Guide to Written Buyer Agreements
- Sellers can still offer to pay the buyer’s agent, and many do, especially in buyer’s markets. The offer now happens outside the MLS.
For listing agreements specifically, the commission clause now typically covers only the listing broker’s fee. If you want to contribute toward the buyer’s side, that’s a separate conversation handled through the purchase contract.
Where the Listing Lives: The MLS
Once the listing agreement is signed, the broker enters the property into a Multiple Listing Service. An MLS is a cooperative database run by and for licensed brokers in a given region. Roughly 500 MLS systems operate across the country, each covering its own geographic area. Only participating brokers can add listings, but the data flows outward to consumer sites like Zillow, Realtor.com, and Redfin, which is how most buyers first find a property.
Every entry gets a unique ID that follows the property through the sale. Standardized fields let buyers compare homes on equal footing: square footage, bedroom and bathroom counts, lot size, year built, systems, included appliances. Accuracy in these fields matters. Other agents rely on MLS data to decide which homes to show, and errors can create liability for the seller or broker.
Listing Statuses You’ll See
As a property moves toward sold, its MLS status updates. Labels vary slightly between systems, but the progression is consistent:
- Active: on the market and accepting offers.
- Under contract: a purchase agreement is signed, but contingencies like inspection, financing, or the sale of the buyer’s current home remain. Some sellers accept backup offers at this stage.
- Pending: major contingencies have cleared and the deal is heading to closing. Backup offers are typically no longer accepted.
- Sold: the transaction closed, the deed was recorded, and ownership transferred. The final sale price generally becomes public record.
Status changes ripple through consumer websites within a day or so, though there’s usually a small lag between the real-world event and the online update.
Disclosures Triggered by Listing a Home
Putting a property on the market triggers disclosure obligations beyond what appears in the MLS description. Specifics vary by state, but most states require sellers of residential property to complete a written disclosure form covering known defects and material facts: structural problems, water damage history, roof age, pest infestations, unpermitted additions. Failing to disclose a known defect can expose a seller to lawsuits for fraud or misrepresentation after closing.
One disclosure is federal and applies everywhere. If the home was built before 1978, the seller must disclose any known lead-based paint or lead hazards before the buyer is bound to the purchase contract, hand over any existing lead inspection reports, and provide an EPA-approved pamphlet about lead hazards.4Office of the Law Revision Counsel. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property Buyers get a 10-day window to test for lead paint before committing, though the parties can agree in writing to a different timeframe or the buyer can waive the inspection.5eCFR. Title 24 Part 35 Subpart A – Disclosure of Known Lead-Based Paint Hazards Upon Sale or Lease of Residential Property
Ending a Listing Early and the Protection Period
Listing agreements aren’t permanent, but exiting one before the term is up isn’t always simple. Every agreement has an expiration date, and if the home doesn’t sell by then, the contract ends on its own. Some agreements include a cancellation clause letting the seller terminate with written notice, sometimes with an administrative fee. Others say nothing about early termination, which means the seller may need the broker’s cooperation to end the relationship. If the broker refuses and the seller sells during the remaining term, the commission can still be owed.
Even after a listing expires or is canceled, most agreements include a protection period, sometimes called a tail or carryover clause. For a window after the agreement ends, often 30 to 45 days, the broker can still claim a commission if the property sells to someone they introduced during the active listing. The broker generally has to give the seller a written list of those prospective buyers shortly after the listing closes out. The clause exists to stop sellers from running out the clock on an agreement and then closing with a buyer the broker found.
Pay close attention to how long the protection period runs and whether it applies to any buyer or only to specifically named prospects. A vaguely worded clause can leave you owing a commission to a broker months after you thought the relationship ended.
Dual Agency
Dual agency happens when one agent or brokerage represents both the buyer and the seller in the same deal. It often comes up when a buyer contacts the listing agent directly instead of hiring their own. The structural problem is plain: a single agent cannot push for the highest price and the lowest price at the same time. At best they become a neutral facilitator rather than an advocate for either side.
A few states, including Florida and Wyoming, ban dual agency outright. Most states allow it but require written disclosure and informed consent from both parties first. Even where it’s legal, it’s one of the most common sources of complaints in residential transactions. Buyers in particular should think hard before agreeing, because the listing agent already has a relationship with the seller and a financial incentive tied to the sale price.