What Is a Listing Agreement — and What's In One?

What Is a Listing Agreement — and What Should Be In One?

A listing agreement is the contract between an owner and their agent or intermediary authorizing them to market and sell the property, business, or asset.

Why it matters: Whether you're selling a house, a commercial building, or a business, the listing agreement is the document that sets the ground rules for the entire sale process — who's allowed to market it, how commission gets earned, and what happens if the deal falls through or the agreement expires mid-negotiation. For a business owner preparing to sell, understanding listing agreement structures matters even before signing one: the difference between exclusive and open arrangements changes how much effort an agent or broker is likely to put in, since 100% commission-based pay only makes sense for the agent if they're guaranteed credit for their work.

Common structures

Type	Agents allowed	How commission is earned
Exclusive Right to Sell	One	Agent earns commission regardless of who finds the buyer
Exclusive Agency	One	Agent earns commission unless the owner finds the buyer directly
Open Listing	Multiple	Only the agent who produces the buyer earns commission

Most listing agreements are exclusive, for the reason above. A net listing is a variant where the owner sets a minimum they must net, and the agent keeps everything above it.

What a listing agreement should specify

Agreement type
Parties
Term length
What's included/excluded from the sale
Price
Payment terms
A "tail" period (commission still owed if a buyer the agent introduced closes shortly after expiration)
Cancellation terms
Each party's obligations
How disputes get resolved

Example: An owner signs a 12-month exclusive right-to-sell agreement with a 6-month tail period. Ten months in, a buyer the agent introduced early on comes back with an offer — two months after the agreement's initial marketing push ended. Because of the tail clause, the agent is still owed commission on that sale even though the deal closed near the end of the term.