What Is a Listing Agreement? Key Clauses Every NYC Seller Should Understand
The listing agreement sets the foundation for your sale. Your agent should walk you through every clause, answer questions, and adjust terms where possible to ensure you feel comfortable. The goal isn’t just to market your property—it’s to build a transparent, trusting relationship.
When you decide to sell your NYC property, one of the first steps is signing a listing agreement with your real estate agent. This contract defines your working relationship—what your agent will do, your obligations as the seller, and the financial terms. While many provisions are standard, the details matter. Understanding them prevents surprises and makes for a smoother sale. Here are the key clauses every seller should know and be prepared to discuss with their listing agent.
1. Exclusivity: Who Represents the Property?
In New York City, the vast majority of listings are marketed under an exclusive right-to-sell agreement. This means your chosen brokerage has the sole right to represent your property, and if it sells during the agreement term, commission is owed—even if you find the buyer yourself.
Other types exist, like exclusive agency or open listings, but they’re rare. Exclusive right-to-sell is the industry standard because it ensures your agent can fully commit resources—professional media, marketing campaigns, open houses—without fear of uncompensated work.
Key takeaway: Exclusivity doesn’t limit your reach. Brokers cooperate via MLS and REBNY networks, which means your property is exposed to thousands of agents and their buyers.
2. Duration: How Long Does the Agreement Last?
Listing agreements typically run 120 to 180 days in NYC, with longer terms common for luxury or niche properties. This is the period in which your agent is authorized to market and sell your home.
Many agreements also include a broker protection period (sometimes 90–180 days after expiration). If a buyer who saw your home during the agreement later closes within that window, commission may still be owed.
Key takeaway: Make sure the duration feels appropriate for your property type and that you understand any post-expiration protection terms.
3. Cancellation Terms: Can You End the Agreement Early?
Sometimes sellers want to pause their sale or switch agents. The cancellation clause tells you whether that’s possible. Some brokerages allow early termination with written notice, while others require you to stay for the full term or pay a fee. Agreements also typically outline
Required notice period (often ~30 days)
Any penalties/fees for early termination
Whether commission is owed if a buyer introduced during the term closes after termination
Key takeaway: Ask your agent upfront about cancellation flexibility before you sign.
4. Commission Structure: How Your Agent Gets Paid
The agreement sets your agent’s commission, typically 5–6% of the final sale price, payable at closing. In NYC, the seller pays both the listing agent (representing you) and, if applicable, the buyer’s agent (representing the purchaser).
If the buyer has no agent, the split often works differently. For example, instead of the standard 3% / 3% split, the listing agent’s side may increase to 3.5% or 4%. In this case, the seller’s total commission payment may decrease slightly, but the listing agent’s share increases.
Key takeaway: Know the total percentage, how it’s allocated, and whether your agreement gives the brokerage rights to any forfeited deposits.
5. Commission Structures After NAR & REBNY Settlements
Historically, many NYC transactions involved a total commission in the 5–6% range, often shared between the listing and buyer’s agents. In practice, the buyer’s side has typically received 2–3%, with Manhattan often at the higher end.
Following the NAR and REBNY settlements, commissions are now decoupled. Buyer-broker compensation can’t be advertised on a Multiple Listing Service (MLS). As the seller, you may still choose to offer compensation to a buyer’s broker, but it must be set separately and is no longer assumed.
While many sales still fall within the 5–6% range, commissions are not set by law and remain fully negotiable. That said, offering too little to the buyer’s broker can affect how offers are structured—or even how much attention your listing receives.
Increasingly, buyers sign representation agreements with their agents that specify a commission rate (often 2–3%). These agreements are not required by law and are freely negotiable, but once in place, they can directly shape how a deal is handled. If your listing offers less than the agreed-upon rate, several outcomes are possible:
The offer itself requests a higher commission percentage to cover the gap.
The offer price is adjusted to account for the shortfall.
The buyer’s agent accepts the lower commission.
The buyer pays the difference out of pocket.
Key takeaway: Underpricing the buyer’s side doesn’t always save you money—it can shift the cost into negotiations or reduce engagement from buyers and agents.
6. Other Clauses Sellers Should Know
Beyond the “big four,” NYC listing agreements often include additional terms:
Broker Cooperation: Your listing agent will market your property to thousands of other agents through REBNY RLS, MLS, or OneKey MLS. This ensures maximum exposure.
Marketing Commitments: Some agreements outline media, advertising, or open house strategies.
Legal Disclosures: Federal law requires disclosures like lead-based paint for pre-1978 properties. These are built into standard agreements.
Staging/Repair Language: Occasionally, agreements include expectations around staging or property condition.
Key takeaway: While most of these are routine, it’s smart to review and ask questions before signing.
7. The Role of Your Real Estate Agent
The listing agreement sets the foundation for your sale. Your agent should walk you through every clause, answer questions, and adjust terms where possible to ensure you feel comfortable. The goal isn’t just to market your property—it’s to build a transparent, trusting relationship. When you understand what you’re signing, you protect yourself and set your sale up for success.
Related Resources and Insights
Thinking about selling your NYC property? Let’s connect. Feel free to reach out. I’m happy to walk you through listing agreements, answer your questions, and help you understand the key clauses before you make any decisions.