What is a listing agreement in real estate?

A listing agreement in real estate is fundamentally a contract between a property owner and a real estate broker that authorizes the broker to represent the owner in selling or leasing the property. This agreement outlines essential details such as the terms of the arrangement, the duration of the listing, the responsibilities of the broker, and the commission structure.

This contractual relationship is crucial, as it establishes the legal basis for the broker to act on behalf of the seller or lessor, ensuring that both parties understand their rights and obligations throughout the transaction process. It essentially formalizes the working relationship and provides a clear path for the broker to market the property effectively, negotiate offers, and ultimately facilitate a sale or lease.

While the other options include aspects related to real estate transactions, they do not accurately define the core purpose of a listing agreement. For instance, stating the property price or disclosing property defects are components of the broader real estate process but do not encapsulate the purpose of the listing agreement. Similarly, a marketing plan, although important, is just one element that may stem from a listing agreement rather than being synonymous with it.