Not Understanding What a Listing Agreement Really Is

A listing agreement is a powerful, legally binding contract between you and a real estate brokerage (not just the individual agent) that grants the brokerage exclusive legal rights to market and sell your property for a defined period. Under an “Exclusive Right to Sell” agreement (the most common type), you cannot sell your home on your own during the listing period without still owing the agent full commission—it doesn’t matter how the property sells, whether through MLS, agent contacts, or even your next-door neighbor. If the sale closes, the brokerage gets paid, period. Even if you find the buyer yourself or someone you met years ago contacts you directly, you’re still obligated to pay commission. Once signed, you’re legally committed for the entire contract length, whether 90 days, 180 days, or longer, even if you’re unhappy or the agent disappears. You can only cancel if the brokerage agrees to release you, and most won’t do this easily, especially after investing time, money, or marketing into your listing. Some agreements have carryover clauses requiring you to pay the broker even after contract expiration if buyers were introduced during the agreement period. Before signing, ask directly: “If I change my mind later, can I cancel this agreement without penalty?” Read every line, especially cancellation and holdover clauses, negotiate shorter terms (90 days is reasonable), and get any verbal promises in writing.