Harmans Lawyers
18 November 2022

Listing Agreements

All Articles & News, Commercial Property, Residential Property

With winter now behind us, the spring and summer months are a popular time to sell real estate. If you are using the services of a real estate agent, you will be required to enter into a listing/agency agreement. Listing agreements are a contract that gives a real estate agent the right to handle the marketing and sale of a property.

General vs Sole Agency

The listing agreement will either be a general or sole agency. A general agency allows multiple real estate companies to market and sell the property at the same time, while a sole agency allows only one real estate company to market and sell the property.

If you enter into a sole agency, you should not sign a listing agreement with any other real estate companies. If you do, this could result in you having to pay both real estate companies a commission. Likewise, if you sell privately during a sole agency, this may result in you having to pay a commission to the real estate company.


The listing agreement should state the real estate agent’s commission rate, together with an estimate of the total commission, based on the real estate agent’s market appraisal of the property. The formula should be stated in the agreement. Typically the commission is tiered, for example:

  • A fixed administration fee i.e. $600.00;
  • 4% on the first $500,000.00;
  • 2% on the balance.

In a competitive market, real estate agents are sometimes open to negotiating a lower commission rate. If a lower rate or discount (for example 15% off the total) has been agreed, it is important that this is recorded in writing within the agreement.

Liability to pay commission after termination

There must be a set time frame specifying when the agency comes to an end. In the case of a sole agency, if the term is longer than ninety days, either party may cancel at any time after ninety days. Sometimes the agreement will provide that upon termination of a sole agency, it automatically becomes a general agency. It is important to check the wording in the agreement and if necessary, cancel the general agency as well. If you do not, then this may result in you being liable to pay an unexpected commission.

Listing agreements will commonly include a clause stating that the seller remains liable to pay a commission when the property is sold to someone introduced by the agent, even if the property has been sold after the agency has ended. It is therefore important to:

  • Check how long this liability to pay lasts; and
  • Request a list of the names of the people that the agent has introduced to the property.

Whether you are looking to sell through a real estate company or privately, Harmans has a team of expert property lawyers ready to help you through the selling and buying process.

The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.