Now that you've chosen a real estate professional to sell your home, you'll need to work together to complete a listing agreement. This legally binding contract authorizes a broker and his or her sales associates to find a buyer for your home, according to the conditions specified in the contract.

Of the four types of standard agreements, Exclusive Right to Sell is the most common. Open Listing, One-time Show and Exclusive Agency are also available. Your real estate professional will select the one that best suits the situation.

Types of Contracts

Exclusive Right to Sell - This popular listing agreement allows the listing agent to market the home to other real estate professionals who represent buyers. Your agent will receive a commission no matter who actually sells the home, even if you sell the home. Listing agents prefer this type of agreement because it guarantees that the cost of marketing the home would be covered.

Open Listing - Frequently used by owners selling their own home, this contract is generally offered to several brokers at once, and commission is due to that one who produces an acceptable offer. An Open Listing essentially prevents an owner and a buyer from negotiating on the side. The agent would not market the home.

An Open Listing can be used when there is no Multiple Listing Service in an area. In this case, whoever locates a qualified buyer first will earn the commission. If you find a buyer on your own, you don't have to pay a commission, unlike the Exclusive Right to Sell Agreement, where an agent earns a commission no matter who locates a buyer. Note: As long as an Open Listing is in force, you can't sign an Exclusive Listing. So carefully select the expiration date of an Open Listing. You can always extend the contract if you desire.

One-time Show - This one-time agreement is similar to the Open Listing in that it's used by a real estate professional when showing a "for sale by owner" home, and it guarantees the commission should his customer purchase the home. It's essentially an Open Listing with a very short window, usually one day, and restricted to one client. The agent is not responsible for marketing the home.

Exclusive Agency Listing - This agreement while a seller has an opportunity to produce a buyer, without paying commission. The agent can market through the MLS, provided that the local MLS does not have a prohibition.

One final thought: Don't let the preprinted forms fool you-everything in a listing agreement is negotiable and may be tailored to reflect your specific requirements.

Mike Cromie of Prudential Properties Northwest I, Palatine, can be reached at 847-705-6500. Mike Yeats of Prudential Properties Northwest, Arlington Heights, can be reached at 847-398-4600.