What is a listing agreement in real estate?

A listing agreement in real estate is a contract established between a property owner and a real estate agent. This document outlines the terms under which the real estate agent is authorized to represent the property owner in selling or leasing their property. It specifies details such as the duration of the agreement, the listing price, the commission structure, and the responsibilities of both the property owner and the agent.

By having a formalized agreement, both parties have a clear understanding of their obligations and expectations throughout the selling process. This legal framework helps protect the interests of the property owner while also providing the real estate agent with the authority needed to market and negotiate the sale effectively.

In contrast, options related to financial contracts, lease documents, or contracts for mortgage approval do not pertain directly to the relationship established between a property owner and a real estate agent in the process of selling or leasing property. Therefore, B captures the specific nature of a listing agreement accurately.