Types of Listing Agreements
There are four main types of listing agreement: open listing, exclusive agency, exclusive right to sell, and net listing. They differ in one thing, who the broker gets paid by. Under an open listing the broker is paid only if they are the one who brings the buyer, under exclusive agency the owner can still sell the property themselves and owe nothing, and under exclusive right to sell the broker earns a commission no matter who sells.
Listing agreements sit in the middle of the Agency section, which is one of the most heavily tested areas on the national exam. Most questions give you a scenario plus one detail about who found the buyer, then ask whether the broker is entitled to a commission, so read every listing question as a payday question.
The one question that separates the four types
Every listing agreement answers the same question differently: who pays the broker, and when? The length of the listing term, the marketing plan, and the commission rate are all negotiable, but the way the agreement treats the owner's own sale is what exam writers use to tell the four types apart.
Open listing
An open listing is the loosest arrangement. The owner can list the property with several brokers at once, and each broker is paid only if they are the one who brings the buyer. If the owner sells the property without a broker's help, no commission is owed to anyone. Because the broker has no exclusive right to anything, open listings are common for land and rentals and rare for homes.
Exclusive agency
Under an exclusive agency listing the broker is the only brokerage hired, but the owner keeps one specific right: to sell the property themselves and owe nothing. The broker earns a commission if any other buyer is produced, whether through the MLS or a cooperating agent, but not when the owner finds the buyer directly.
Exclusive right to sell
The exclusive right to sell listing is the strongest form for the broker and the most common form in residential practice. The broker is paid no matter who produces the buyer, including the owner. The property is typically placed in the MLS, cooperating brokers are offered a share of the commission, and the listing broker's right to be paid survives the owner's own sale.
Net listing
A net listing sets the owner's minimum acceptable amount and lets the broker keep everything above it as commission. The attraction for the broker is obvious, and so is the danger: the broker's pay rises with the sale price, so a broker who undervalues a property can take a windfall. Some states prohibit net listings outright, and others permit them only when the seller is told the full sale price and the broker's compensation. Where a question describes an open-ended upside for the broker, that is the signal.
How this appears on the exam
The scenarios usually run this way: an owner signs one of the four agreements, the owner then finds a buyer (or the listing expires and a sale follows), and the question asks whether the broker is entitled to a commission. Track two things, which agreement was signed and who produced the buyer, and the answer is almost always one clean step away.
Memory trick
OPEN
Run these four checks on any listing agreement question: O-P-E-N.
- O
Owner exception: if the owner can sell it themselves and owe nothing, you are looking at an exclusive agency listing, not an exclusive right to sell
- P
Procuring cause: the broker has to be the one who produced the buyer, which is the whole test under an open listing
- E
Exclusive right to sell: the broker collects a commission no matter who finds the buyer, including the owner
- N
Net listing: the owner names a minimum net amount and the broker keeps everything above it, which is why several states restrict or ban the practice
Screenshot this: OPEN is how you'll remember types of listing agreements on exam day.
How the exam tricks you on this
The classic trap is exclusive agency against exclusive right to sell, and it always turns on one line in the scenario: the seller finds the buyer themself. Under an exclusive agency listing the owner keeps the right to sell the property on their own and owes the broker nothing when they do. Under an exclusive right to sell listing, that same owner owes the broker the full commission. Read the scenario slowly and ask who actually produced the buyer.
Two more patterns to watch:
- Compensation does not create the agency. A question may describe a broker who is paid by the seller but never signed a listing, or an agent whose commission comes from a cooperating broker. Payment is not what makes someone an agent, the agreement and the law of agency are.
- Net listing legality. A net listing lets the owner set the amount they must net and the broker keep the difference. If the question asks whether a net listing is permitted, read the wording: states that allow it generally require the owner to be told the full sale price and the broker's compensation, because an uncapped upside for the broker looks like a conflict of interest.
Try real exam questions on types of listing agreements
These come straight from our question bank: answer to see the explanation instantly.
From an agent's point of view, the most desirable form of listing agreement is a(n)
Tip: press 1–4 to answer, Enter for the next question.
Related terms
Fiduciary Duties
Fiduciary duties are the six legal obligations a real estate agent owes their client: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care, remembered as OLDCAR. They require the agent to place the client's interests above everyone else's, including the agent's own.
Read definitionDual Agency
Dual agency is when one agent represents both the buyer and the seller (or both landlord and tenant) in the same transaction. Because the agent can no longer give either side undivided loyalty or full disclosure, both parties must give written, informed consent before it can happen, and the agent must stay strictly neutral on price and negotiating strategy for the rest of the deal.
Read definitionProcuring Cause
Procuring cause is the broker's effort that leads to a sale, the link between the broker's work and the customer's decision to buy. The broker who was first to find the customer and whose efforts induced the transaction has earned a commission, even when another agent or the owner later closes the deal.
Read definitionNet Listing
A net listing sets a minimum amount the seller must receive at closing, and the broker keeps everything above that figure as commission. The broker's pay is simply the difference between the sale price and the seller's net. Because that open-ended upside can tempt a broker to undervalue the property, several states restrict or prohibit net listings.
Read definitionExclusive Agency vs. Exclusive Right to Sell
An exclusive agency listing hires one broker but lets the seller find a buyer alone and owe no commission. An exclusive right to sell listing pays that broker no matter who produces the buyer, including the seller. The only real difference is whether the seller's own sale triggers a fee to the broker.
Read definition
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