What is the primary purpose of a listing agreement?

The primary purpose of a listing agreement is to establish a broker's duty to market the owner's property. This contractual arrangement outlines the responsibilities of the broker, ensuring they will actively promote and sell the property on behalf of the owner. It clearly defines the scope of work the broker will undertake, including marketing strategies, communications with potential buyers, and any obligations concerning property showings.

By setting these expectations, the listing agreement helps both the seller and the broker understand their roles in the transaction process. It holds the broker accountable for their efforts in securing a sale and provides a framework for the commission structure once a sale is completed. As such, the listing agreement is fundamental in creating a professional relationship focused on successfully marketing and selling the property.