Chapter 6 - Brokerage Agreement Flashcards
Listing Agreement
An employment contract between a property owner and a real estate broker which authorizes the broker/ firm to attempt to sell a property at a specified price and terms in return for compensation.
What must every listing agreement have to not be voided?
- Describe the real estate
- The price
- Commission to be paid
Duty to Cooperate, Protected Buyers, & Amendment REEB 24.13
- Refusal prohibited - You cannot refuse to draft any written proposals
- Withholding written proposals prohibited. - Every offer must be submitted to parties in a timely fashion
a. Listing firms shall permit access to listed property for showing purposes.
b. Licensees shall promptly present all written proposals received.
Exclusive Right to Sell Listing
One firm is appointed as the seller’s singular and only agent. This gives exclusive power and permission to market the seller’s property and regardless of who sells the property the firm will receive a commission.
This is the most common.
Exclusive-Agency listing
Contains all the elements of an exclusive right to sell listing except the owner retains the right to sell the property themselves without owing the listing broker a commission.
Open Listing
Given to a number of firms, with the first firm to secure a buyer under the terms of the listing agreement earning the commission. Also known as a nonexclusive listing.
Seller is financially obligated only to the firm who succeeds in finding a buyer.
Net Listing
Based on the net price the seller will receive if the property is sold.
Illegal in Wisconsin and in most states.
Option Listing
Gives someone the right to purchase the listed property at some point in the future.
Right of First Refusal
Same as Option listing but the holder must wait until the owner decides to sell the property. Then the owner can decide to refuse.
Reasons for agreement termination
- Completion
- Expiration
- Death or Incapacity
- Destruction or condemnation
- By operation of law, court order of foreclosure or owners bankruptcy
- Mutual Consent
Comparative Market Analysis (CMA)
Analyzes properties that are similar in size, location, and amenities.
It is based on:
1. Recently closed properties (solds)
2. Properties currently on the market (competition)
3. Properties that did not sell (Expired listings)
Real Estate Condition Report
mandatory and essential tool disclosing any and all structural defects for the buyer to make a fully informed decision about his/her offer. If a buyer does not receive a fully completed copy of this report within 10 days after the acceptance of the contract of sale or option contract for the described real property, the buyer has the right to rescind that contract (Wis. Stat. §709.02)*
Elements of a Valid Contract
- Description of the real estate
- The price of the property
- Commission to be paid and the time of payment
- Period of time of the agreement with a definite termination date
- The names of the broker and seller
- Signatures of both broker and seller - must be signed by the person who pays the commission
- Duties of the listing firm
- statement of nondiscrimination
- statement regarding antitrust
Encumbrance
Lien, mortgage or liability that is attached to a property that may lessen its value
Examples: Liens, encroachments, special assessments, property taxes, easements
Minimum services
- Accept delivery of and present to the client all offers and counteroffers
- Assist the client in developing, communication, negotiating, and presenting offers, counteroffers and notices that related to offers
- Answer the client’s questions relating to the offers, counteroffers, notices, and contingencies
