What is an "exclusive right to sell" listing agreement?

An "exclusive right to sell" listing agreement is a contractual arrangement between a property owner (the seller) and a real estate broker that grants the broker the sole and exclusive right to market and sell the property. With this type of agreement, regardless of whether the broker or another party finds the buyer, the broker is entitled to the agreed commission upon closing the sale. This arrangement incentivizes the broker to fully invest in marketing the property since they are guaranteed a commission if the property sells during the contract period.

This type of agreement is advantageous for sellers as it ensures that they have a dedicated representative who will actively promote their property. It also provides the broker with strong motivation to exert effort in finding a buyer since their commission depends solely on their success in that exclusive role. The enforceable nature of the contract is an essential element, making it a legally binding agreement rather than just a casual or verbal commitment.