What is a listing agreement?

A listing agreement is specifically a contract between a seller and a real estate broker that grants the broker the authority to market and sell the property on behalf of the seller. This formalized relationship enables the broker to represent the seller and negotiate transactions, typically including details such as the commission rate, the duration of the listing, and the property description.

The other options do not accurately represent what a listing agreement entails. For instance, a verbal contract between friends for property sale lacks the legal formalities and structure necessary for real estate transactions. A written agreement for a mortgage loan relates specifically to financing the property, rather than the sale process itself. Lastly, a lease agreement pertains to rental arrangements and does not involve the sale of property. Understanding the distinction of a listing agreement is crucial for anyone entering the real estate field, as it establishes the foundational relationship and responsibilities between the seller and the broker.