What is a "listing agreement" in real estate?

A listing agreement in real estate is a crucial contract that authorizes an agent to sell a property on behalf of the owner. This agreement outlines the terms under which the agent will represent the seller, including the listing price, duration of the agreement, and the commission structure. It serves as a formal arrangement that establishes the responsibilities and obligations of both the seller and the agent.

The reason why this answer is correct lies in the fundamental role of a listing agreement in facilitating the sale of real estate. By granting authority to the agent, sellers benefit from the agent’s expertise in marketing the property, negotiating with potential buyers, and navigating the complexities of real estate transactions.

In contrast, the other options do not accurately describe a listing agreement: a contract for property rental involves leasing arrangements, a contract to buy a property pertains to the sale rather than the representation of the seller, and a document for mortgage approval relates to financing rather than the sale of the property itself. Each of these options serves a different purpose in real estate, reinforcing the specific role of a listing agreement in the selling process.