Creating an Exclusive Listing Agreement

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

To ensure that a property is marketed effectively, many sellers look to enter into an exclusive listing agreement with a real estate agent. Such agreements offer the assurance that their property will have dedicated attention, with the intention of reaching maximum value in the shortest time possible. They also protect the interests of both parties - the seller knowing how much commission they’ll pay while the agent is guaranteed payment should they facilitate a sale. However, it is essential for both to understand what an exclusive listing agreement entails as well as its implications.

The Genie AI team understands this importance, and provides free resources to help people create their own legal documents such as exclusive listing agreements without needing to pay for a lawyer’s expertise. Genie AI does this by harvesting millions of datapoints which then form templates for market-standard agreements tailored specifically for each situation. With access to our community template library and step-by-step guidance, you can draft and customize high quality contracts with confidence - regardless of whether or not you have an account with us!

Being legally binding documents, it’s important that all details are agreed upon before signing any agreement; such details include commission payable upon completion of sale, length of commitment and other clauses specific to each seller’s needs. Therefore it’s essential that both parties have full understanding of what they’re agreeing to before entering into any contract - something which exclusive listing agreements are no exception to.

Ultimately though, these legal measures offer everyone involved stability in terms of pricing structure and responsibility during negotiations; allowing buyers and sellers alike peace of mind while conducting transactions on their desired terms with minimal disruption or concern over being taken advantage of by either party involved in the deal. To read on below for more info on our step-by-step guidance and how you can access our template library today!

Definitions (feel free to skip)

Initial Meeting and Discussion of Terms: This is the first step in the process where the real estate agent and the property owner meet to discuss and negotiate the details of their agreement.

Exclusive Listing Agreement: This is a legally binding agreement between a real estate agent and a property owner that outlines the terms and conditions of how the property will be marketed and sold.

Commission Rate: The rate of money that the real estate agent will receive for their services.

Listing Term: The length of time that the real estate agent will list the property for sale.

Listing Price: The price the property owner is asking for the property.

Preparation for Agreement: Gathering all the necessary information, documents, and data from the property owner to create the agreement.

Drafting the Agreement: Writing the agreement to include all the necessary legal language and provisions that must be included to meet legal requirements.

Reviewing the Agreement: Examining the agreement to make sure it meets both parties’ expectations and interests, as well as all legal requirements.

Negotiations and Amendments: Adjusting the agreement to ensure that it meets the needs and interests of both parties.

Signing the Agreement: The process of both parties signing the agreement to make it legally binding and enforceable.

Execution of Agreement: Making sure that all necessary documents and forms are signed and filed in accordance with the agreement and that all parties are in compliance with the terms of the agreement.

Advertising and Promotion: Creating a marketing plan, utilizing social media and other marketing channels, and creating promotional materials to advertise and promote the property for sale.

After Signing the Agreement: Discussing the responsibilities of each party during the term of the agreement, as well as any remedies that may be available to either party in the event of a breach of the agreement.

Finalizing the Sale: Negotiating any necessary contracts, completing any necessary paperwork, and transferring funds and title to complete the sale.

Contents

• Initial Meeting and Discussion of Terms
• Preparation for Agreement
• Drafting the Agreement
• Reviewing the Agreement
• Negotiations and Amendments
• Signing the Agreement
• Execution of Agreement
• Advertising and Promotion
• After Signing the Agreement
• Finalizing the Sale

Get started

Initial Meeting and Discussion of Terms

• Schedule an initial meeting with the client to discuss the terms of the Exclusive Listing Agreement
• Discuss the terms of the agreement, such as length of the contract, fee structure, and marketing plan
• Explain the services that you will provide and the responsibilities of the client
• Obtain all of the necessary information from the client
• Answer any questions the client may have about the agreement
• When you have obtained all the necessary information and both parties have agreed to the terms, you can move on to the next step.

Preparation for Agreement

• Gather relevant documents, such as the property’s title report, survey, and any other real-estate related documents
• Make copies of the documents to keep for the client and to provide to the other party
• Prepare a checklist of the items that need to be included in the agreement
• Review the client’s needs and goals for the sale
• Determine the applicable laws and regulations for the sale of the property
• Calculate the estimated commissions for the sale
• Draft a plan for how the sale will be conducted
• Review any offers and counteroffers from the other party
• Once all of the preparation is complete, you can move on to drafting the agreement.

Drafting the Agreement

• Create a document that states the terms of the exclusive listing agreement
• Include the following information:
• Name and contact information of the real estate agent
• Name and contact information of the seller
• Description of the property
• The length of the listing agreement
• The commission rate
• Any other terms and conditions
• Double-check that all information is correct before moving on
• You will know when you can check this step off your list when you have completed the document and reviewed it for accuracy.

Reviewing the Agreement

• Carefully read the agreement to ensure all information is correct
• Verify that all parties involved in the agreement are listed and have agreed to the terms
• Double-check that all the dates and deadlines are accurate
• Confirm that the language used is legally binding and that the agreement is legally enforceable
• When all of the above is confirmed, you can move on to the next step of negotiations and amendments.

Negotiations and Amendments

• Discuss any amendments and negotiate the terms of the agreement with the seller
• Make sure that the seller understands all of the terms of the agreement and any amendments
• If the seller agrees to the terms and amendments, prepare a written agreement that reflects any changes
• You can check this step off the list when the seller has agreed to the terms and amendments of the agreement.

Signing the Agreement

• Review the final version of the exclusive listing agreement
• Ensure that all changes and amendments are included as agreed upon
• Get the agreement signed and dated by both the seller and real estate agent
• Make sure that all necessary parties have signed the agreement
• Obtain a copy of the signed agreement for all parties

Once the agreement has been signed by all necessary parties, you can move on to the next step of the process.

Execution of Agreement

• Have the signed listing agreement notarized or witnessed by a third-party.
• Make sure to provide a copy of the agreement to both parties.
• Once the agreement is executed, the listing is officially active.
• You will know this step is complete when both parties have a copy of the executed agreement.

Advertising and Promotion

• Decide which marketing and advertising strategies will be used to promote the property
• Set up a budget for any advertising or promotional materials that will be used
• Determine the period of time for which the advertising and promotion will run
• Outline the advertising and promotion strategies in the listing agreement
• Sign the listing agreement to officially agree to the advertising and promotion strategies
• Once the agreement is signed, the advertising and promotion strategies can begin
• Keep track of the advertising and promotion efforts to ensure they are being completed within the agreed upon time period
• When the advertising and promotion strategies are completed, the step of advertising and promotion is complete and you can move on to the next step.

After Signing the Agreement

• Make sure the seller has the original copy of the listing agreement
• Follow up with the seller to ensure that all the necessary signatures are on the agreement
• Make sure to keep a copy of the agreement for yourself and provide a copy to the seller
• Make sure to keep all documents related to this transaction including all contracts and any additional paperwork
• Once all necessary signatures are on the agreement and all related paperwork is gathered, you can check this step off your list and move on to the next step, which is Finalizing the Sale.

Finalizing the Sale

• Schedule an inspection of the property with a qualified inspector and review the report findings with the seller
• Verify that the buyer has obtained their financing and that all conditions of their loan have been met
• Prepare the closing documents and review with the buyer and seller
• Ensure that all closing fees have been paid
• Schedule a closing date and time
• Provide the buyer with any necessary keys or garage door openers on the day of closing
• Once all conditions of the contract have been met and the closing documents have been signed, the sale is complete
• You will know that the sale is complete when all the paperwork has been signed and the closing has been recorded with the county clerk’s office

FAQ:

Q: Is a Listing Agreement the same as a Contract?

Asked by Sarah on April 1st 2022.
A: A Listing Agreement is a type of contract, but it’s not the same as a general contract. It’s specific to real estate and is used to document the terms of an agreement between a seller and a real estate broker or agent. A Listing Agreement outlines the rights, duties, and obligations of both parties, including how the broker will market the property, how much commission the broker will be paid, when the listing ends, and more.

Q: What are the legal requirements for creating a valid Listing Agreement?

Asked by Jacob on June 28th 2022.
A: In order to create a valid Listing Agreement, several legal requirements must be met. First, both parties must agree to and sign the document. Second, both parties must have legal capacity to enter into an agreement; this means that they are of legal age and have the legal right to enter into such an agreement. Third, consideration must be exchanged; this means that each party must receive something in exchange for their agreement to the terms of the document.

Q: How does a Listing Agreement differ from a Buyer Agency Agreement?

Asked by Anna on August 11th 2022.
A: While both agreements are used in real estate transactions, they differ in purpose. A Listing Agreement is used when a seller hires a real estate agent or broker to market and sell their property. The agreement outlines all of the terms between the seller and the broker, including how much commission will be paid and when the listing ends. Conversely, a Buyer Agency Agreement is used when a buyer hires a real estate agent or broker to help them find and purchase a property. The agreement outlines all of the terms between the buyer and the broker, including what services the broker will provide and how much commission will be paid.

Q: What are some of the clauses that should be included in a Listing Agreement?

Asked by Matthew on October 22nd 2022.
A: When creating a Listing Agreement, several clauses should be included in order to ensure that all aspects of the agreement are covered. These clauses should include details such as commissions to be paid, services provided by both parties, expiration date of listing period, authorization for advertising expenses, dispute resolution process, indemnification clause for any liability issues that may arise from mistakes made during negotiations or sale process, rights for either party to terminate agreement early under certain circumstances, and any other pertinent information that may be relevant to the specific transaction.

Q: How does jurisdiction affect Listing Agreements?

Asked by Rachel on January 19th 2022.
A: The jurisdiction in which a Listing Agreement is created can have an impact on its validity and enforceability. Different jurisdictions have different laws governing real estate transactions and contracts in general; therefore it is important for all parties involved to be aware of these laws before entering into an agreement. Additionally, if any disputes arise from or related to the Listing Agreement then they must generally be resolved in accordance with whichever jurisdiction’s laws are stipulated in the document.

Q: Are there any differences between US vs UK vs EU Listing Agreements?

Asked by John on March 12th 2022.
A: While there are some similarities between US vs UK vs EU Listing Agreements there are also some differences due to varying jurisdictional laws governing real estate transactions in each region. For example, in some US states agents may only represent their clients exclusively while in other states agents may represent both buyers and sellers; this is not allowed in either UK or EU jurisdictions where agents must represent one side exclusively throughout negotiations and sale process and cannot switch sides even with written consent from both parties involved. Similarly each region has different requirements regarding commissions paid out at closing which all parties should be aware of prior to entering into an agreement.

Q: How long does a typical Listing Agreement remain valid?

Asked by Emma on May 15th 2022.
A: The length of time that a typical Listing Agreement remains valid depends on several factors including what is specified in the document itself as well as local laws governing real estate transactions in each region or jurisdiction where it is created; however most agreements remain valid for anywhere from 6-12 months unless either party terminates it earlier under certain circumstances outlined in the document itself or local laws stipulate shorter periods of time before renewal is required.

Q: What happens if one party breaches their obligations under a Listing Agreement?

Asked by David on July 5th 2022.
A: If one party fails to fulfill their obligations under a Listing Agreement then they may be held liable for any damages incurred by the other party as a result of their breach; this may include monetary compensation for lost profits due to missed deadlines or failure to complete services as agreed upon in addition to other damages depending on specific details outlined in the document itself or local laws governing real estate transactions in each region or jurisdiction where it was created.

Q: What happens if there is disagreement over commission fees outlined in a Listing Agreement?

Asked by Ryan on September 8th 2022.
A: If there is disagreement over commission fees outlined in a Listing Agreement then both parties should attempt to negotiate an acceptable outcome prior to litigation; however if negotiations fail then either party may choose to take legal action against one another in order to resolve any disputes over fees owed according to what was stipulated in the document itself or local laws governing real estate transactions in each region or jurisdiction where it was created.

Q: How can I ensure my rights are protected when creating a Listing Agreement?

Asked by Lauren on November 17th 2022.
A: When creating a Listing Agreement it is important for all parties involved to ensure that their rights are protected by including clauses which clearly outline all aspects of their agreement including services provided by both sides, commissions owed at closing, dispute resolution process if needed, indemnification clause for any liability issues that may arise from mistakes made during negotiations or sale process, expiration date of listing period if applicable, authorization for advertising expenses if applicable, rights for either party to terminate agreement early under certain circumstances if applicable, and any other pertinent information that may be relevant to the specific transaction; furthermore it is also important for all parties involved to be aware of any relevant jurisdictional laws which may impact validity or enforceability of their document prior to entering into an agreement so that they can protect themselves accordingly if needed later down the line.

Example dispute

Lawsuit for Breach of Exclusive Listing Agreement:

• Breach of contract: If a seller breaches an exclusive listing agreement by selling their property to someone other than the real estate broker who was given exclusive rights to list the property, the seller can be sued for breach of contract.
• Misrepresentation: A seller can be sued for misrepresentation if they make false or misleading statements regarding the property that is being sold.
• Negligence: If a seller fails to disclose known material defects in the property, they can be sued for negligence.
• Damages: In the event of a successful lawsuit, the plaintiff may be able to recover damages. These damages may include lost commissions, legal fees, and other costs associated with the sale.
• Settlement: In some cases, the seller and buyer may be able to reach an agreement to settle the dispute without going to court.

It is possible for a plaintiff to win a lawsuit referencing an exclusive listing agreement. The plaintiff must be able to prove that the seller breached the contract, that the seller made misrepresentations, or that the seller was negligent in disclosing material defects. The plaintiff must also be able to prove that they suffered damages as a result of the seller’s breach or negligence. If the plaintiff is successful in proving their case, they may be able to win damages, including lost commissions and legal fees.

Templates available (free to use)

Exclusive Listing Agreement

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