OREA Listing Agreement: Form 200 Fully Explained

RECO has a new guide, which is effective from December 1st, 2023.

Some new concepts are introduced such as the self-represented party, the designated representation, etc.

Compared to the brokerage representation, Designated Representation reduces the probability of occurrences of Multiple Representation. The relevant part of the designated representation will be indicated in the listing agreement.

For details on the change and new regulation and practice, Please click and refer to RECO Information Guide

What is a Listing Agreement?

A Listing Agreement in real estate also called a Seller Representation Agreement, is a contract between the home seller and the real estate brokerage who represents the homeowner to sell the property after the agreement is signed. OREA Form 200 is commonly used in Ontario.

The sellers require to sign Form 200. Any cancellation or termination of the Listing Agreement requires a mutual release and the signing of Form 242.

MLS vs Exclusive Listing Agreement

Most properties are sold via MLS (Multiple Listing Service) in the current market. This is the system where realtors can post your properties and other realtors can find properties.

Another way to sell the property is using the Exclusive Listing Agreement, which has the following characteristics:

• The property itself has a high-end value.
• It is not listed in MLS.
• It is shown only by the agents of the brokerage with whom the seller has signed the exclusive agreement.
• The seller has specific requirements on how the property is viewed with considerations such as privacy.

Relationship between the seller and brokerage

The agreement is between the seller and the agent’s brokerage ; the salesperson is acting on behalf of the brokerage.

What is included in a Listing Agreement?

A detailed explanation of the terms and clauses

VALIDATION OF TIME

The agreement time validation is negotiable. In the case of an MLS® listing, the real estate board has a minimum requirement of 60 days. In case it is beyond 6 months, the seller should be reminded of this and put an initial sign there.

SELLER'S WARRANTY

The sellers acknowledge and warrant that they are not under agreement with any other agent/brokerage.

DEFINITIONS AND INTERPRETATIONS

Seller is equivalent to vendor

COMMISSION

• It declares the total fee that the seller has agreed to pay to the real estate company if the property is successfully sold or if the order is accepted, but the transaction is not completed due to the seller’s default or neglect.
• There is also a holdover period time clause to point out the commission obligation of the seller in situations when the home is privately sold to a buyer who was shown or introduced during the previous listing period.
• If it happens to have a new listing brokerage involved, the sellers still owe the difference of commission to the previous buyer’s agent agreed upon in the contract.

FINDER’S FEE

The seller agrees that the seller brokerage may take other incentives, referral fees, or reward

REPRESENTATION

• It defines the different types of agency relationships that may occur in a real estate transaction.
• It also authorizes the real estate company to co-operate with any other real estate companies to market the Seller’s property and split the commission sharing structure between the parties.

Multiple Representation

The short description is that Multiple Representation happens when the agent has 2 or more clients in the same deal. To avoid the conflict of interest, RECO outlined and regulated it closely. There are a number of rules applied, which are listed in the agreement.

REFERRAL OF ENQUIRIES

• The Seller agrees, during the Listing Period, that any inquiries or offers should be immediately advised to the listing brokerage.
• If such an inquiry ends up as a valid offer, the seller is obliged to pay commission.
• The holdover clause also applies.

MARKETING

The listing brokerage is allowed to show, place "For Sale" and "Sold" sign(s), and the marketing decisions. The listing brokerage is not liable for the market effort and activities.

WARRANTY

The Seller has the exclusive authority and power to sell the property and has informed the brokerage of any claims on the property

INDEMNIFICATION AND INSURANCE

The seller’s agent or brokerage is not held liable for the condition of the property or damages that may occur during showings. The seller’s property is properly insured.

FAMILY LAW ACT

The Seller hereby warrants that spousal consent is not necessary.

VERIFICATION OF INFORMATION

The listing brokerage and salesperson are authorized and appointed to obtain and use any reasonable information regarding the property.

USE AND DISTRIBUTION OF INFORMATION

• The salesperson and the listing brokerage are allowed to use and distribute the seller’s personal information for property marketing purposes.
• If it is an MLS listing, the seller will not claim any harm due to posting the information on the MLS system.
• The seller further acknowledges the use and distribution of that information by the pursuant real estate boards.

SUCCESSORS AND ASSIGNS

Successors and assigns are bound by the agreement if the buyer dies.

CONFLICT OR DISCREPANCY

The added provision to the agreement supersedes the pre-print clauses

SCHEDULE(S)

Additional clauses and terms are listed in the schedule attached to the agreement

ELECTRONIC COMMUNICATION

Electronic Communication is applicable, ELECTRONIC SIGNATURES is applicable

DECLARATION OF INSURANCE

The salesperson has insurance coverage required by RECO

In Conclusion

This guide helps you understand the terms commonly used in the agreement.

This guide is not drafted by the lawyer, it is from an agent’s interpretation and perspective. Please check and verify with your real estate lawyer for completeness and accuracy.