What a listing agreement should spell out before you sign

Signing a listing agreement without reading it carefully is one of the most common missteps homeowners make when selling. You hand over a pen, assume the terms are standard, and suddenly you're locked into a contract that doesn't reflect what you actually discussed. Days later you realise the agent's commission is higher than you agreed, the period runs longer than you expected, or there are clauses about who pays for marketing that nobody mentioned. By then, extracting yourself is costly and messy.

A listing agreement is a binding contract between you and the agent. It gives them the right to market and sell your property — and it specifies what that right is worth to them, how long it lasts, and what happens if you want out. Before you sign, you need to understand exactly what you're committing to, because the devil lives in the details.

The core terms that belong in black and white

Start with the commission structure. Your agreement must state clearly whether the agent is earning a percentage of the sale price, a flat fee, or a tiered amount. If it's a percentage, confirm it applies to the final sale price, not a lower base. Ask whether the agent's fee covers all marketing costs (photography, portals, open house materials) or whether you'll be charged separately. Some agents bundle these in; others invoice you for extras. Get it in writing either way, with approximate figures if possible.

The mandate type belongs in the agreement too. Are you giving this agent an exclusive right to sell (sole mandate), or can you market with other agents at the same time (open mandate)? The agreement must be explicit. A sole mandate typically locks you in for a set period — often three months. Make sure that period works for your timeline. If the market is slow or you need flexibility, negotiating this down matters more than most sellers realise.

Confirm the start and end dates. A listing agreement that runs from 1 February to 30 April is clearer than "three months from signature." Include what happens at the end: does it renew automatically, or does the agent need your written consent? Automatic renewal clauses have trapped sellers into unwanted extensions, so read this section with real care.

The agreement should spell out what cancellation looks like. Can you cancel if you're unhappy, and if so, on what notice and under what conditions? Some agreements let you walk away penalty-free within a cooling-off period; others lock you in for the full term. Some agents won't cancel unless you buy a different agent's services instead. None of these are inherently wrong, but you need to know which one applies to you before you're bound.

What else protects your interests

Look for clauses about proceeds from the sale. Your agreement should confirm that all funds go into a separate client trust account and that you receive your money within a specified timeframe after the sale is registered. This is standard, but it deserves a glance.

Check whether the agent is authorised to accept offers on your behalf. Most agreements allow this — it's practical — but some require you to review and approve every bid before it becomes binding. If you prefer to be in the loop for all offers, that condition can be written in.

Read any clauses about what the agent can do if the sale falls through. Can they continue marketing after a deal collapses? Are they entitled to a commission if the buyer they introduced later comes back and completes a purchase? These "tail clauses" are common and often reasonable, but they must be transparent.

Never skip the dispute resolution section. How will disagreements about commission or performance be handled? Small claims court, mediation, or arbitration? Know your exit route if things go wrong.

Once you've read every section, take the agreement to someone you trust — a friend who's sold before, a conveyancer, or even a second agent — and ask them to flag anything unusual. Most agreements are fair, but templates vary, and an extra pair of eyes catches traps. When you're ready, compare verified estate agents on Strove, review their terms carefully, and only sign when every line makes sense to you.