A listing agreement is best described as what?

• A. An employment contract used by buyers to hire a broker
• B. An employment contract used by sellers to employ a broker to find a buyer
• C. A rental agreement
• D. A loan agreement

Answer: (B)

A listing agreement is a contract in which the property owner hires a real estate broker to market and sell the property, giving the broker authority to act as the seller’s agent. It establishes the employment relationship—the seller authorizes the broker to perform services like pricing discussions, marketing, showings, and negotiating offers—and outlines how the broker will be compensated, the listing price or price range, the duration of the agreement, and the duties the broker will undertake (such as advertising and MLS exposure).

It’s not a rental agreement or a loan agreement, and it isn’t an arrangement used by buyers to hire a broker. Those would involve leases or financing, or a buyer-side contract, respectively. A listing agreement specifically ties the seller to the broker to facilitate the sale.