All owners must sign the listing agreement. The person living out of state can fax a signed agreement back and have it be considered valid. Another solution would be for two of the three persons to sign a special power of attorney over to the third person, thus allowing the third party to act on behalf of the other two. I would only suggest this if all three parties understand the inherent risks involved (this is where I insert the phrase "consult a real estate attorney").
All three parties would need to be in agreement on selling the home, and the price that is asked. Additionally, when an offer comes in, all three parties would again need to agree on the offer acceptance price and terms. Lastly, when signing the deeds (at closing), the parties must all sign in front of a notary (no faxes allowed on this document).
Best of luck!