What is the primary purpose of a listing agreement?

The primary purpose of a listing agreement is to establish a working relationship between the owner of the property and the broker. This agreement defines the terms under which the broker agrees to represent the property owner in the sale or lease of their property. It creates a legal framework that obligates the broker to act in the best interests of the owner while providing the owner with a clear understanding of the broker's duties, responsibilities, and the services they will provide.

By outlining the expectations and obligations of both parties, the listing agreement ensures a collaborative effort toward selling the property. It will typically include details such as the duration of the agreement, the commission structure, and any specific marketing strategies that will be employed.

While other elements such as pitching the property, disclosing defects, and setting the selling price may be involved in the overall process of selling a property, the fundamental role of the listing agreement is to cement the professional relationship and ensure that both the owner and broker are aligned in their goals and expectations.