Exclusive listing agreement

Definition

The contract making one broker the only one who can sell a business.

Why It Matters

It is the document a seller signs and a buyer never sees, and it sets three things that shape the whole process: the commission, how long the exclusivity runs, and the tail period during which the broker is still owed a fee if the business sells to somebody they introduced. For a buyer, the tail is the clause worth knowing about, because it is why a broker who showed you a business two years ago may still be owed on it. For a seller, the length is the term to negotiate hardest, since an underperforming listing is otherwise locked up for its full run.