What does the term "listing agreement" refer to in real estate?

The term "listing agreement" specifically refers to a contract between a property owner and a real estate agent that authorizes the agent to represent the owner in the sale of the property. This legally binding document outlines the terms of the relationship, including the responsibilities of both parties, the duration of the agreement, and the commission or fee structure for the agent.

In a listing agreement, the property owner grants the agent the exclusive right to market and sell the property, giving the agent a fiduciary responsibility to act in the owner's best interest. This formal arrangement is crucial in real estate transactions as it provides a clear framework for the selling process and protects the rights of both the owner and the agent.

Other options do not accurately describe a listing agreement. A verbal agreement between a buyer and seller lacks the formal structure necessary to be considered a listing agreement, which must be written and include specific terms. The process of negotiating property prices is more related to the closing stage of a sale rather than the initial agreement to enlist an agent’s help. Lastly, while a legal document for purchasing a property exists, it describes a different facet of a real estate transaction, namely the purchase agreement, rather than the preliminary contract that enlists a real estate agent’s services.