A contract between a property owner and a real estate brokerage that authorizes the brokerage to market and sell the property. It specifies the listing price, commission rate, duration, and the terms under which the property will be marketed. In Ontario, this is a legally binding document governed by TRESA.
Why It Matters
Before your home goes on the market, you'll sign a listing agreement. This locks in your agent's commission, the listing price, and how long they have to sell your home. Negotiate the terms before signing -- especially the duration and commission rate. Once it's signed, you're committed.
Real-World Example
You hire an agent to sell your semi in Leaside. The listing agreement specifies a 5% total commission (2.5% to the listing agent, 2.5% offered to the buyer's agent), a 90-day term, and a listing price of $1,350,000. The agreement also includes a holdover clause -- if a buyer who was introduced during the listing period purchases the property within 60 days after the listing expires, the commission is still owed.
Ontario & GTA Context
In Ontario, listing agreements are OREA standard forms governed by TRESA. Commission rates are always negotiable -- there is no set or standard rate. RECO prohibits agents from claiming that commission rates are fixed by industry standards. The listing agreement must also disclose how the commission is split between the listing and buyer's agent side.
How It Works in Practice
Interview at least two or three agents before signing a listing agreement. Compare their marketing plans, commission rates, and market analysis. Pay special attention to the holdover clause and the listing term -- a shorter term gives you more flexibility if the relationship is not working.
Common Questions
Can I cancel a listing agreement in Ontario?▾
What is a holdover clause in a listing agreement?▾
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