Before you sign a Texas listing agreement, ask what you are paying, who gets paid, how long you are bound, what happens if you want out, and what the agent will actually do to sell your home. The Agency Dallas believes a seller should be able to answer all five in plain language before putting a name on the page, because the agreement controls your costs and your options for the whole listing period.
What is a listing agreement, and why does it matter?
A listing agreement is the contract between you and a real estate broker that authorizes the broker to market and negotiate the sale of your home. It sets the price you are asking, how long the agreement lasts, and the broker's compensation. In Texas, brokers commonly use Texas Realtors forms such as the TXR 1101 residential listing agreement, so most of the terms appear in standard paragraphs you can read before signing.
How does compensation work, and what should you ask?
Compensation is where sellers most often have questions. Texas Realtors' guidance on the updated TXR 1101 form, published September 30, 2024, explains that Paragraph 5A sets a total broker's fee that covers both the listing broker and any buyer's broker, with the listing broker paying part of it to the buyer's broker. Paragraph 5B covers only the listing broker's fee and offers no compensation to a buyer's broker. The same guidance says the fee can be stated as a percentage, a flat fee, or another structure, and that only one fee line should be completed.
Questions to ask:
- What is the total fee, and how is it calculated?
- Will any part be offered to a buyer's broker, and how much?
- If a buyer arrives without an agent, how is that handled?
- Are there other charges, such as an administrative or marketing fee?
- What do you get for the fee, in writing?
For the wider picture, see how real estate commissions work in Texas after the NAR settlement and what it costs to sell a house in Dallas.
How long does the agreement last, and how do you get out?
Read the term and the exit language before anything else. Ask:
- What are the start and end dates?
- Can I cancel early, and how? Is there a fee?
- What happens if the home does not sell by the end date?
- Is there a period after expiration during which the broker may still claim a fee, and who does it apply to?
- Does the agreement renew automatically?
We cannot give you a typical term, because it depends on the agreement and the market. What matters is that the answers are in the document and that you agree with them.
What will the agent actually do to sell my home?
A good agreement is matched by a plan. Ask for specifics on:
- The pricing method, including the comparable sales behind it. Our guide to how to price your property in the Dallas-Fort Worth market explains what a sound analysis includes.
- Photography, marketing, and how often you will get activity updates.
- How showings, offers, and negotiations will be handled.
- Whether the home would be marketed on the MLS, privately, or both.
If you are weighing alternatives, our guides on selling with an agent versus an iBuyer and selling without a realtor explain the tradeoffs.
What other terms deserve a second look?
Check the price and terms you are authorizing, any items that convey with the home, who may show it and when, and how disagreements are handled. Make sure blanks are completed and that you receive a signed copy. If a paragraph is unclear, ask for an explanation in writing or have a real estate attorney review it. We are not a law firm, and this is general information, not legal advice.
How does The Agency Dallas approach listing agreements?
The Agency Dallas walks sellers through each paragraph of the agreement before signing, explains the compensation options in plain language, and ties the listing plan to a pricing analysis you can examine. We believe a seller who understands the agreement is a better partner in the sale.
Related reading
This week we also published guides on what happens if your Dallas home does not sell, the best DFW suburbs for buy-and-hold rental investing, and short-term versus long-term rentals in Dallas.
Frequently asked questions
What should be in a Texas listing agreement?
At minimum it should state the asking price, the agreement's start and end dates, the broker's compensation, and whether any compensation is offered to a buyer's broker. It should also describe the broker's duties and how either side can end the agreement. Read every paragraph and ask about anything unclear.
Does the seller have to offer compensation to a buyer's agent?
Not necessarily. On the updated TXR 1101 form, Paragraph 5A provides for a total fee shared with a buyer's broker, and Paragraph 5B provides for a listing broker's fee only. The choice is yours, so discuss how each option could affect buyer interest before you sign.
Can I cancel a listing agreement early?
It depends on what the agreement says. Look for the termination paragraph and any fee or notice requirements, and ask the broker to explain them. Some arrangements require the broker's agreement to end early, so settle your questions before signing instead of after.
How long should a listing agreement last?
There is no single right length. A longer term gives your agent more time but binds you longer, while a shorter one gives you more flexibility. Choose a term that fits your market, your price, and your plan, and ask what happens if the home has not sold when it ends.
Should I have a lawyer review my listing agreement?
It is a reasonable step if any terms are unclear or your situation is unusual. Standard forms are written to be understood, but a lawyer can explain how a paragraph applies to you. The Agency Dallas can explain the real estate side, but we do not give legal advice.
