The Listing Agreement is the contract between the Property Owner and the Listing Brokerage that outlines the terms of the Service offering. This Form is a contract between a Seller and a real estate company that gives the real estate company permission to act on the Seller’s behalf when they offer their home for sale in the open market. A written agreement is necessary in order to secure commission and to ensure compliance with the REBBA Code of Ethics.
Here is a breakdown of what the Listing Agreement consists of:
- The Parties to the Agreement
- The time frame of the Agreement. The Ontario governing body, the Real Estate Council of Ontario (RECO), requires the Seller to acknowledge all Agreements which are longer than 6 months.
- The Price which the property will be offered to the market.
- The Commission fee is to be paid upon a successful transaction and indicates a period of days after the expiry of the contract that the real estate company is entitled to their fee if the seller ends up selling the property privately to a Buyer who was introduced or shown to the property within the contract period. This is known as the “holdover period”.
- The fee to be paid to a Brokerage which is representing a Buyer by the Listing Brokerage out of the Total commission fee mentioned above.
- Brief description of Multiple Representations and the limitations of the Listing Brokerage in this situation.
- Requirement of the Seller to work with the listing brokerage and to refer any/all inquiries on the property to their salesperson.
- Permission for the Listing Brokerage to advertise and market the property for sale.
- Indemnification of the salesperson from any damage that may be caused by Buyers when viewing the property.
- The privacy act details and the use of personal information.
- Declaration of Errors and Omissions Insurance of the Salesperson as required by the Federal Real Estate and Business Brokers Act (REBBA)