Which of the following statements best describes the purpose of a listing agreement?

The purpose of a listing agreement is fundamentally to create a clear and binding obligation between the seller and the broker. This document outlines the terms of their relationship, specifying the responsibilities and expectations of both parties. The listing agreement serves as a formal contract that grants the broker the authority to market and sell the property on behalf of the seller. It typically includes details such as the duration of the listing, the commission to be paid upon a successful sale, and any specific conditions or requirements the seller might have.

While quickly selling the property, establishing market value, or formalizing an oral agreement may be related outcomes or secondary purposes of having a listing agreement, the primary and most essential reason for this document is to establish that contractual obligation. This ensures both the seller and the broker have a mutual understanding and legal recourse should either party fail to meet their obligations under the agreement.