What Must a Listing Agreement Include When Selling in British Columbia?

Before a brokerage puts your home on the market, you will usually be asked to sign a listing agreement. It is the document that sets out what the brokerage will do for you, how long the arrangement lasts and how it gets paid. Reading it carefully before you sign is one of the most useful things you can do as a seller.

This article walks through what the British Columbia Real Estate Services Rules require that agreement to contain, and what else you should receive along the way. Use it as a checklist, and confirm the details with a lawyer or with BCFSA if anything is unclear.

This article covers the law of British Columbia.

When a written listing agreement is required

A brokerage that provides trading services to a property owner offering real estate for sale must have a written service agreement, commonly called a listing agreement. The one exception is where the prospective client waives it.

Timing matters. The agreement must be entered into before the brokerage represents you in offering the property. In practical terms, the paperwork should come first, not after your home is already being marketed.

Who must sign and what the agreement must state

The agreement must be signed by you, as the client, and by an authorized signatory of the brokerage. It must also contain certain terms. Use this list when you review the draft:

• The address of the property.
• The effective date.
• The expiry date.
• A description of the services the brokerage will provide.
• The remuneration, and the circumstances in which it is payable.
• If the listing brokerage will share its remuneration with a cooperating brokerage, the breakdown of that sharing.

If any of these are missing, vague or blank, ask for them to be completed before you sign. The expiry date in particular tells you how long you are committed, so check it against what you were told.

Remuneration: what the Rules do and do not say

The agreement must say what the brokerage will be paid and when that payment becomes payable. The Rules do not set a commission rate, so the figure is something you should read closely and, if you wish, discuss with the brokerage before signing.

One method of calculating pay is barred: remuneration based on the difference between the listed price and the actual sale price is not permitted. If a draft ties the brokerage's pay to that gap, raise it right away.

Also read how the agreement describes the circumstances in which remuneration is payable. This is where sellers most often find surprises, so ask the brokerage to explain it in plain words if the wording is unclear.

Changes, copies and the disclosures you should receive

If the agreement is changed later, the amendment must be in writing and signed by you and an authorized signatory of the brokerage. A copy of any written agreement must be delivered to you immediately on execution. Keep that copy somewhere safe, along with any amendments.

Other disclosures come at different stages of the process:

• Before services begin: the licensee must disclose, in the approved form, whether they will represent you as a client. If you were an unrepresented party, the licensee must also explain the limited assistance available and recommend independent professional advice.
• When an offer is presented: the licensee acting for you must give you a disclosure, in the superintendent-approved form, of what you pay the listing brokerage, any payment to the buyer's brokerage, the amount the listing brokerage keeps, and any other remuneration.
• Money amounts in that offer disclosure must be stated in dollars.

The dollar-figure disclosure is useful because it shows what the commission terms in your agreement mean in real money for the offer in front of you.

What to do before you sign

• Ask for the full agreement in writing and read every page, including any schedules.
• Confirm that the address, effective date, expiry date, services and remuneration are all filled in correctly.
• Check whether the agreement has a maximum term or any other limit on how long it can last, and ask the brokerage to point to the wording.
• Ask how any sharing of remuneration with a cooperating brokerage is broken down.
• Make sure you receive a copy immediately after signing, and keep any amendments with it.
• Do not agree to changes by phone or text alone; they should be in writing and signed by both sides.

If something in the agreement worries you, a lawyer can review it before you commit. You can also contact BCFSA, the regulator, to confirm what the Rules require.

Frequently asked questions