The Short Answer
A listing agreement is the written contract between you and a real estate brokerage that lets the brokerage market and sell your home on your behalf. It sets the price you'll list at, how long the agreement lasts, what the brokerage will do, how and when it gets paid, and what happens if the agreement ends before your home sells. If you're selling in Northridge, Granada Hills, Porter Ranch, Mission Hills or elsewhere in the north San Fernando Valley, this is the first document you'll sign, and it's worth understanding line by line.
What a Listing Agreement Does
In California, a listing creates an agency relationship: the brokerage becomes your agent, with fiduciary duties to you that include loyalty, confidentiality, care, full disclosure of material facts and honest dealing. The agreement also defines the limits of that relationship. A listing agent can market your home and negotiate for you, but generally can't sign contracts that bind you.
It has to be in writing to protect the brokerage's right to be paid. According to the California Department of Real Estate (DRE), a broker generally can't enforce a commission claim for breach of contract without a signed written agreement, and any extension or change to the listing also needs to be in writing.
The Four Types of Listing Agreements
The DRE describes four common types. Most residential listings use the first one.
| Type | How it works | When the brokerage is paid |
|---|---|---|
| Exclusive right to sell | One brokerage is the only agent for the sale during the listing term. | If the home sells during the term, no matter who finds the buyer, including you. |
| Exclusive agency | One brokerage is the only agent, but you keep the right to sell the home yourself. | If any agent sells it; not if you find the buyer on your own. |
| Open listing | You can list with several brokers at once, and sell it yourself. | Only the broker who actually procures the buyer. |
| Net listing | You set the net amount you want; the broker keeps anything above it. | Only if the price exceeds your net. Legal in California, but the DRE cautions it can easily lead to conflicts and should be used only with sophisticated sellers and full disclosure. |
What's in the Agreement, Section by Section
The property and the list price
The address and legal description, plus any items included or excluded, such as appliances or a detached spa. The list price should come from recent comparable sales, not a hopeful guess. See how a CMA helps price a home.
The term and a definite end date
California law requires an exclusive listing to include a definite, specified date of final and complete termination (Business and Professions Code §10176(f)). There's no single required length. You and the brokerage negotiate it, so pick a term long enough to market the home properly but short enough that you're not locked in if it isn't working.
Compensation, and the negotiability notice
For homes of one to four units, California requires the listing to state in at least 10-point bold type, before the compensation clause: "The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker." A brokerage can't use a listing form with a commission rate preprinted before it's negotiated with you (Business and Professions Code §10147.5).
The agreement should also say whether you're offering compensation to a buyer's broker, and on what terms. Since August 17, 2024, under the NAR settlement practice changes, offers of compensation to buyer brokers can't be published on the MLS, and MLS participants working with buyers must have a written agreement with them before touring a home. Sellers can still choose to offer buyer-broker compensation or concessions; it's a decision to make with your listing agent and put in writing.
The protection (safety) period
Most listings include a protection clause: for a set period after the listing expires, the brokerage is still owed its compensation if you sell to a buyer who was shown the property or made an offer during the listing. The DRE notes that for the clause to work, the broker must give you a written list of those prospective buyers within the time the agreement specifies. Read how long the period is and what triggers it.
Withdrawing the property
A typical compensation clause also obligates you to pay if you withdraw the home from sale or otherwise make it unmarketable during the term without the brokerage's consent. If your plans could change, discuss that before you sign.
Your responsibilities
Expect to warrant that you own the property and have the right to sell it, to disclose known material facts (California has a long list of required disclosures; see our step-by-step seller guide for the LA City and state forms), and to make the home reasonably available for showings.
Agency Disclosure and Dual Agency
For homes of one to four units, California requires a written agency disclosure form that explains the duties of a seller's agent, a buyer's agent and a dual agent. The listing agent gives it to you before you sign the listing, and you sign a receipt for it.
Dual agency means the same brokerage represents both you and the buyer. It's legal in California with disclosure and consent from both sides, but it changes the relationship: a dual agent can't tell the buyer you'd accept less than the list price, or tell you the buyer would pay more than their written offer, without that party's express written permission. If you'd rather have separate representation for each side, say so before you sign.
Can You Cancel a Listing Agreement?
It depends on what the agreement says. An exclusive listing runs to its stated end date unless its own terms, or a written agreement between you and the brokerage, say otherwise. Look for:
- a written cancellation or termination clause, and what notice it requires;
- whether any fees or marketing costs are owed on early cancellation;
- how the protection period applies after a cancellation; and
- whether a withdrawal (taking the home off the market) is treated differently from a cancellation.
If the relationship isn't working, talk with the brokerage first. Many will agree to a mutual cancellation in writing. For a legal question about a specific agreement, consult a California real estate attorney.
Before You Sign: A Checklist
- Is it an exclusive right to sell, exclusive agency or open listing, and is that what you want?
- What is the exact end date?
- What is the compensation, how is it calculated, and when is it earned?
- Are you offering compensation or concessions to a buyer's broker, and is that written down?
- How long is the protection period, and what does it take to trigger it?
- What are the cancellation and withdrawal terms?
- What will the brokerage actually do: pricing analysis, prep advice, photos, MLS entry, showings, offer review, escrow management?
- Have you received and signed the agency disclosure?
Related: How to prepare your home for listing · How to handle multiple offers
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About David Petikyan
David Petikyan leads Property Provider Group with eXp Realty, working with San Fernando Valley sellers and buyers.
David Petikyan · DRE #02089725 · eXp Realty of Greater Los Angeles, Inc. #02188471
Listing Agreement FAQ
What is an exclusive right to sell listing agreement?
It's a listing in which one brokerage is the only agent for the sale during the listing term, and it earns its compensation if the home sells during that term no matter who finds the buyer, including the seller. It's the most common type of residential listing.
Does a listing agreement have to be in writing in California?
For the brokerage to enforce its right to compensation, yes. The California Department of Real Estate explains that a broker generally can't enforce a commission claim for breach of contract without a signed written agreement, and extensions or changes must also be in writing.
How long is a listing agreement?
There's no fixed length in California; the seller and brokerage negotiate it. The law does require an exclusive listing to include a definite, specified termination date.
Can you cancel a listing agreement in California?
It depends on the agreement's terms. An exclusive listing runs to its stated end date unless its terms or a written mutual agreement allow otherwise, so check the cancellation, withdrawal and protection-period clauses before you sign. Many brokerages will agree to a mutual cancellation in writing.
Is real estate commission negotiable in California?
Yes. For homes of one to four units, California requires the listing agreement to state in bold type that the amount or rate of real estate commissions is not fixed by law and may be negotiable between the seller and broker.
What is a net listing agreement?
In a net listing, the seller sets the amount they want to net and the broker keeps anything above it. Net listings are legal in California, but the Department of Real Estate cautions that they can easily lead to conflicts with the broker's duties.
Sources
CA DRE Reference Book, Ch. 10: Agency · CA DRE Reference Book, Ch. 20: Contract Provisions · NAR Settlement FAQs.
Information is believed accurate but not guaranteed. Laws, tax rates and fees change; verify zoning, lot size, permits, taxes, disclosures and school assignments independently, and consult an attorney, CPA or escrow officer for advice on your situation. David Petikyan, DRE# 02089725, eXp Realty. eXp Realty of Greater Los Angeles, Inc. #02188471. Equal Housing Opportunity.