There are several different types of listing contracts, but very few of them are used. The "Multiple Listing Service® Listing", the "Commission Agreement", the "Exclusive Listing", and the "Open Listing".
Multiple Listing Service® Listing
The Multiple Listing Service (MLS®) is a cooperative arrangement managed by a real estate association as a service to its membership. The system enables members to cooperate in the showing and selling of properties listed by all other members thereby encouraging transactions between clients of all the cooperating members. This system can be an advantage to a seller wanting wide exposure for the property.
MLS® contracts contain a term authorizing the listing brokerage to post the listing, including pictures of the property, and allow cooperating members to access the property. While MLS® encourages a spirit of cooperation between brokerages, an MLS® is exclusive in that the listing contract authorizes only one brokerage to act for the seller. That brokerage holds responsibility for marketing, negotiations, and payment of commission to cooperating brokers.
The Multiple Listing System® will not allow a member brokerage to post a listing that excludes any other member brokerage. Therefore, if a seller wants to restrict certain brokerages from accessing the property, they should enter into an "Exclusive Listing Contract" and advise the brokerage of their restrictions in writing these listing will not be posted on MLS®.
Many consumers will be familiar with the website www.realtor.ca. The site displays information on listed properties across Canada and is the consumer version of the MLS® used by agents.
A variation of the open listing is the "Commission Agreement" for a "one-time show" listing contract. Similar to an open listing in many respects, as it is most often used by real estate agents who are showing a FSBO (For Sale By Owner) to one of their clients. The property seller signs the agreement, which identifies the potential buyer and guarantees the agent a commission should that buyer purchase the property. This prevents the buyer and seller from negotiating directly later and trying to avoid paying the agent's commission.
As with an open listing, agents will not spend money marketing your property and it will not be placed in the Multiple Listing Service®.
This form of listing contract gives one brokerage the authority to act on the seller's behalf. "Exclusive" does not mean the brokerage can unilaterally keep the listing to itself and prevent other brokerages from showing or selling the property, unless the client requests it in writing. While most sellers want the best exposure possible, there are circumstances where a seller may have need for privacy or wish to exclude certain brokerages or agents from conducting showings and bringing offers.
Unlike the open listing, the seller will be obliged to pay the listing brokerage a commission even if the seller sells directly to a buyer. The exception to this is if a specific buyer(s) is excluded from the contract.
Also known as a "pocket listing" or "general listing".
An "Open Listing" is one where the owner gives one or more agents the authority to find a buyer for the property, while the seller also reserves the right to try to sell it. They are most commonly found in commercial properties. However, it is also an option for a residential "for sale by owner" property owner who is willing to work with real estate professionals who have buyer clients. These agreements may written or oral. The terms usually allow agents to bring buyers to view the property and require the owner to pay commission if the agent is successful in selling the property to that buyer.
MLS® Posting Without Representation
This is a variation of the Open Listing with the exception that the information about the property is posted on MLS®. The seller enters into a listing contract with an agent to post the property information on the MLS® but has elected not to be represented by the listing agent and reserves the right to deal directly with other agents who may have a buyer or to sell the property himself. The seller will pay the listing agent a fee when the listing agreement is signed not when the property sells. Once the property is posted on MLS® the agent has no further obligation to the seller. The seller may also authorize the agent to advertise the property. Because the agent is competing with other agents, as well as the "by owner" seller, many agents are reluctant to spend money on such advertisements.
More on Listing Contracts
Most agents use the "standard" listing contract developed by the Alberta Real Estate Association for use by its members, but no particular form is required by Alberta legislation.
The "standard" contract can be changed to accommodate the needs of the parties to the contract. A listing agreement is a contract and, as in any contract, the parties to it can set out any terms they agree to, provided they are not acting unlawfully. Therefore, if you do not agree to a certain term, a term does not apply to your situation or when some other term should be included, the change can be made and you and the agent will initial the change to indicate your agreement to it.