Ch 12: Listing Agreement & Servicing Listings

Question 1

What does an owner listing do?

Answer 1

Authorizes a broker to represent an owner or landlord in the sale or lease of a property

Question 2

With an exclusive right-to-sell agreement, what is the seller’s obligation with regard to the broker’s commission?

Answer 2

If the property sells while the broker has the listing, the seller must pay the agreed upon commission, regardless of who actually procured the buyer (who was the procuring cause). This means that even if the seller finds the buyer with no help from the broker, the seller still owes the broker the commission.

Question 3

What is it called when an owner sets a minimum amount that he wants to receive from the sale of the property and lets the broker have as commission any amount above the set minimum?

Answer 3

Net Listing

Question 4

How is an exclusive agency agreement different from an exclusive right-to-sell agreement?

Answer 4

An exclusive agency listing agreement gives a broker the right to market and sell a property for a specified time period, while the owner retains the right to find a buyer and sell the property without owing the broker a commission.

Question 5

What is a broker protection clause?

Answer 5

A broker protection clause says that the owner will compensate the broker if, within a certain number of days after the listing expires, the owner sells the property to someone the broker introduced to the property during the listing period.

Question 6

A listing agent must tell a seller about what two major negotiable items?

Answer 6

A statement agreement must explain that the duration of the broker’s employment and the broker’s fees are negotiable.

Question 7

Is a licensee allowed to perform services before an agreement is signed?

Answer 7

A licensee may perform services before an agreement is signed, but the licensee is not entitled to recover a fee, commission or other valuable consideration in the absence of a signed agreement.

Question 8

What is the maximum length of an exclusive listing agreement?

Answer 8

A listing period may not exceed 1 year

Question 9

What is the purpose of an agency representation agreement?

Answer 9

An agency representation agreement is a legally binding contract that creates an agency relationship authorizing a broker to serve as the agent for a principal in a real estate transaction. The written agreement is essentially an employment contract between the broker and the principal.

Question 10

Give an example of a potential conflict of interest a broker might have while representing a client.

Answer 10

The broker may have two buyer-clients who want to make offers on the same property.

Question 11

List three provisions found in agency representation agreements.

Answer 11

Term of contract
Property information
Description of services
Pricing information
Description of services
Conflicts of interest
Compensation
Rights, obligations, and liabilities of all parties
Dispute resolution
Fair housing
Criminal information
Binding agreement
Fax and electronic signatures
Signatures of all parties

Question 12

What kind of marketing provisions would be found only on a listing agreement and not on a buyer agency agreement?

Answer 12

Listing agreements usually have additional provisions regarding the use of a lockbox, internet marketing, signs, and listing the property on a multiple listing service.

Question 13

What must be included at the bottom of each listing agreement page?

Answer 13

Licensee and seller must both initial the bottom of each listing agreement page.

Question 14

What does Preferential Assessments refer to?

Answer 14

Preferential Assessments indicate whether the property is being preferentially assessed regarding tax abatements.

Question 15

Before a seller signs a listing agreement, you should encourage the seller to seek what type of advice, if the seller has any questions about his or her rights/ obligations under the contract?

Answer 15

Consult a lawyer.

Question 16

What document is used to changes a listing agreement?

Answer 16

A Change To Listing Contract (CLC) is used when the original contract needs to be changed.

Question 17

What is the primary criticism that sellers have about their agents?

Answer 17

Lack of communication

Question 18

What kinds of things should you include in a weekly activity report?

Answer 18

Number of inquiries on the property that week
Number of showings
Advertising done that week
Open houses held
Number of open house visitors
Comments made by other agents or prospective buyers

Question 19

Even during weeks when there is little or no interest in the property, why is it better to send weekly activity reports to sellers instead of monthly activity reports?

Answer 19

Frequent communication with your sellers is critical, so the weekly contact is best.

Question 20

What information should you tell a seller regarding your advertising plan?

Answer 20

Sellers need to know the “schedule” of when their property will be advertised and the methods you’ll use to do that advertising.

Question 21

What is the best way for sellers to avoid excessive stress while their home is available for showings?

Answer 21

Whether the situation involves a last-minute showing or a canceled appointment, it’s important for sellers to realize that flexibility will help keep such situations from becoming unduly stressful.

Question 22

How can listing agents encourage attendance at their agent open houses?

Answer 22

As an incentive, the hosting agent can hold a drawing or raffle for a prize such as a set of free car washes or a gift certificate to a popular restaurant. Agents must attend to be considered for the prize.

Question 23

What are fixtures?

Answer 23

Fixtures are personal property that have been attached to real estate. Once they become attached to the property, they become real property.