With most listings, if a broker finds a buyer "ready, willing, and able" to purchase the property under the conditions established by the listing, the broker is then entitled to a commission. In broad terms there are three major types of listings. "Open" or general listings mean that during the listing period the property may be sold by a broker with an open listing or directly by the owner. More than one broker can have a listing under this nonexclusive format, and if the property sells, the broker who found the buyer gets the commission. 

If the owner sells it, no broker is entitled to a commission. Open listings work well when a broker wants to show a property to a particular individual; however, they're unworkable in cooperative deals. If broker A has an open listing and broker B has a prospect,
B can deal directly with the owner if he can also get an open listing and avoid splitting a fee with A.

An "exclusive agency agreement" means that during the listing period, the owner or one broker may sell the property. If the property is sold by the listing broker, or by any broker, the listing broker is entitled to a fee. If the property is sold directly by the owner, the broker does not receive a commission. An "exclusive right to sell" agreement means that if the property is sold during the listing period by anyone, including the owner, the broker will get a commission. 

This term of listing is the most common and is widely used in multiple listing systems. A listing agreement, like any contract, is negotiable. Here are the major issues to consider.

Term: Investors should authorize the shortest reasonable term, enough time for the broker to market the property but not enough months of inactivity to pass. Sixty to 90 days should be sufficient for an initial listing period. If the broker is active and does a good job, the listing can be continued.

Fee: Brokerage commissions are absolutely negotiable. Recognize, however, that real estate fees are commonly shared among brokers and agents, so if the fee is too low, brokers won't be interested in the property. For example, if area fees are typically 6 percent they will be split 50/50 in a cooperative sale. But what happens with a 5 percent fee? If the broker who lists the property, the "listing" broker, offers to cooperate with other brokers on a 50/50 basis, then your property will be less attractive than properties of equal value where owners pay a 6 percent fee. The bottom line: If you list property on a discounted basis, make certain cooperating brokers receive a competitive fee, 3 percent in this case; otherwise you'll lose the benefit of the cooperative system. For instance, if you list at 5 percent in a 6 percent market, make certain that cooperating brokers know that they will receive a 3 percent cut if they bring in a buyer. The listing broker will then get 2 percent if the property sells cooperatively, or 5 percent if he finds a purchaser. The commission's division in the event of a cooperative sale should be shown in the listing contract. Note also that brokers can be hired by the hour as consultants - that is, you do some of the work in exchange for a lower cost. 

Price: A fee will be due and payable if a broker finds a buyer "ready, willing, and able" to meet your price. The price you set should be at the top of the market yet within the realm of reason.

Points: Many standardized listing agreements ask sellers to state the number of points they're willing to pay to assist with a buyer's
financing. Since you don't have an offer in hand when a listing is created, you don't know what a purchaser may offer for your property.
If you agree in the listing contract to pay a certain number of property. It's bet points, you've given away a valuable negotiating advantage. Better to offer no points in the listing agreement and then to consider the issue when a signed offer is presented.

Deposits: Sellers can stipulate in a listing contract that for an offer to be acceptable it must be accompanied by a certain deposit. For
example, an owner might list a property at $200,000 and require a $20,000 deposit. Sellers should require high deposits simply to establish a negotiating position. If a written offer comes in with a smaller deposit, sellers can then decide whether to accept the otter or not.

Extras: A listing agreement can, and should, enumerate those items either not for sale or which sellers want to use as bargaining chips.
For instance, the clothes washer and dryer can be excluded from the listing. If the buyer's offer includes the washer and dryer, a seller can then accept the offer or counter with a demand for better terms.

Modifications: Listing agreements are typically written by and for the real estate community, and it follows that such term to favor
broker interests. However, listing agreements can be modified with pro-investor clauses as well. A listing might specify how many times
a property will be advertised during the term of the listing and where the ads will be placed. Another clause might require a certain
number of open houses during the listing term. In effect, listing agreements--like all contracts--can be customized to produce individualized results.

There are many brokers who want your business, good news for investors because a large number of brokers means a strong degree of
competition. Investors can certainly hire traditional brokers who charge for an inclusive package of services. Alternatively, discount and flat-fee brokers are now available in most communities. For investors this means that selling needs can be fine-tuned to meet your specific requirements. Your range of choices might include:

No broker. You sell by yourself
No broker, some attorney. You sell by yourself and use an attorney to provide local forms and check offers before acceptance.
Some broker. In this situation you sell by yourself but retain a broker as a consultant, paid on an hourly basis or with a given fee.
Some broker, the menu plan. Here you pick and choose from a list of services offered by fiat-rate brokers.
All broker. A broker takes care of the sale.

It's a good idea to speak to several brokers before marketing your property and to hear how they would sell it, what they think it's worth,
and why. Also ask about commitments to advertise, hold open houses (if appropriate), enter an MLS system, and cooperate informally with other brokers. As you listen to each answer, ask if this is the person you want representing your interests in the marketplace.