Ch. 3 Working with Sellers Flashcards
Should every client receive all signed documents?
Yes. They are:
* Listing Appointment documents:
* Listing agreement. Consumer Information Statement.
* Seller’s Residential Property Condition Disclosure. Completed and signed by residential sellers, the agent should sign the disclosure to acknowledge he has reviewed it.
* Informed Consent to Dual Agency. RESPA Disclosure.
* Lead-Based Paint Disclosure. Estimate of Seller’s Net Proceeds.
* Lockbox authorization (if applicable).
Are commissions negotiable in NJ?
Yes. It is a violation of NJREC rules to have commission rates pre-printed on listing agreements and except for open listings, no listing agreement may be executed with the expiration date left blank.
What is a broker to broker commission split?
The listing broker determines (with seller’s permission) what percentage of the total commission will be given to the buyer’s broker.
What is a broker to agent commission split?
The employing broker and his/her agents negotiate what percentage of the commission paid to that broker will be given to the agent.
The Listing agreement serves what two purposes?
It is an EMPLOYMENT AGREEMENT in which the seller employs the broker to market the property under the terms established in the agreement.
AND
It is also an AGENCY AGREEMENT, and the law clearly establishes the obligations—the fiduciary duties— that the agent (broker) owes to his/her principal—the seller.
What is the Listing Agreement?
❖A bilateral contract between seller and broker that creates a Special Agency agreement. All property owners—and both husband and wife, even if one of them is not on the deed of their home being listed—MUST sign the listing.
❖Must be between competent parties.
❖Must be a mutual agreement between broker and sellers as to its terms.
❖The agreement must be for a lawful purpose.
❖Must clearly state the commission offered by the seller to listing broker and commission split with buyer’s broker.
❖If the broker will not cooperate with other brokers, the seller must sign a Waiver of Broker Cooperation.
❖The “tail clause” is an extension (aka the “Broker Protection Clause.”
What must be attached to every listing agreement?
The Attorney General’s Letter to Property Owners which protects and prohibits discrimination.
What is material information?
- Information is “material” if a reasonable person would attach importance to its existence or non-existence in deciding whether or how to proceed in the transaction, or if the licensee knows or has reason to know that the recipient of the information regards, or is likely to regard it as important in deciding whether or how to proceed, although a reasonable person would not so regard it.
- Licensees shall disclose all information material to the physical condition of any property which they know or which a reasonable effort to ascertain such information would have revealed to their client or principal and when appropriate to any other party to a transaction. Licensees shall also disclose any actual or potential conflicts of interest which the licensee may reasonably anticipate.
What is a Material Defect?
a specific issue with a system or component of a residential property that may have a significant, adverse impact on the value of the property, or that poses an unreasonable risk to people. The fact that a system or component is near, at, or beyond the end of its normal useful life is not in itself a material defect”.
What is a LATENT Defect?
defects that are hidden or not obvious to the buyers but would be significant to them in their home-buying decisions if they had been disclosed.
What are conflicts of interest for a Real Estate Agent?
- If she or a member of her immediate family, or any other licensee or real estate brokerage has a financial interest in the property.
- If the agent knows of his buyer’s inability to provide the promised financial contribution to close.
- If the agent knows her seller’s financial situation could prevent the transaction from closing.
What is a Stigmatized Property?
- If a licensee receives an inquiry from a prospective purchaser or tenant about whether a particular property may be affected by a social condition or psychological impairment, licensees shall provide whatever information they know about the social conditions or psychological impairments that might affect the property.
- As used in this section, the term “social conditions” includes, but is not limited to, neighborhood conditions such as barking dogs, boisterous neighbors, and other conditions which do not impact upon or adversely affect the physical condition of the property.
- As used in this section, the term “psychological impairments” includes, but is not limited to, a murder or suicide which occurred on a property, or a property purportedly being haunted.
What year does a house have to be built to have to include the Lead Based Paint Disclosure?
Any residential property built prior to 1978.
What are the way a listing can be terminated?
*Performance. When the title transfers and the listing agreement ends. *Expiration of the listing agreement.
*Bankruptcy, death or mental incapacity of the principal or broker. This provision has no effect if any of those conditions occur to the listing salesperson or broker-salesperson.
*Abandonment or revocation. A broker has the right to renounce the listing agreement and a seller has the right to revoke his authority to the agent. However, the non-cancelling
party might then be able to take legal action against the cancelling party for breach of contract.
*Mutual agreement. The agreement can be ended by mutual consent of seller and broker. *Impossibility of performance. If the property is destroyed or is taken under eminent
domain.
*Court order.
What are the 4 Types of Listings?
- OPEN listing
- EXCLUSIVE AGENCY (EAL) listing
- EXCLUSIVE RIGHT TO SELL (ERS) listing
- NET listing
An open Listing is…
❖Owner can sell property and owes nobody a commission.
❖Multiple brokers can list the property.
❖Only the broker who introduces a buyer earns the commission.
❖Listing cannot be entered into the MLS.
❖The only listing agreement that can have a blank expiration date.
An Exclusive Agency Listing is…
❖Owner can sell property and owes nobody a commission.
❖Only one listing broker.
❖A cooperating broker who introduces a buyer earns the commission, payable through the listing broker.
❖Listing must be entered into the MLS.
❖Listing agreement cannot have a blank expiration date.
An Exclusive Right to Sell Listing is…
❖Owner cannot sell property without paying listing broker a commission.
❖Only one listing broker.
❖A cooperating broker who introduces a buyer earns the commission,
payable through the listing broker.
❖Listing must be entered into the MLS.
❖Listing agreement cannot have a blank expiration date.
A Net Listing is…
❖Owner tells listing broker, “Get me $X from a sale and you can keep anything above that amount.”
❖Net listings are ILLEGAL in New Jersey because they create a conflict of interest: a broker cannot serve his client’s interests while simultaneously serving his own interests.
Can an Agent conduct an Appraisal on a property?
No, only a licensed NJ Real Estate Appraiser can conduct an appraisal.
Value is…
The price a ready, willing and able buyer will pay a ready, willing and able seller where neither party is under duress, after the property has had a reasonable exposure to the market.
Demand is…
How many people are looking for this type of property
right now?
Utility is…
What benefits to a buyer will this property provide?
Scarcity is…
How many similar competing properties are on the market right now?
Transferability is…
How easy will it be to transfer ownership now and in the future?
