General - Chapter 5 Lesson 2 Flashcards
Listing agreement
written agency employment contract between a seller and broker (stipulates conditions which broker is paid commission)
Special Agent
under agency law, listing broker
Soliciting offers
listing agreement isn’t seller promising to sell, merely…
promising to pay commission for…
finding a ready, willing, and able buyer
Types of listing agreements
exclusive right to sell, exclusive agency, open listing, and net listing
exclusive right to sell listing agreement
gives broker sole right to represent the seller, gives greatest opportunity to receive a commission
bilateral
both parties promise to perform (broker - RW+A buyer seller - pay)
Exclusive agency listing agreement
broker sold right to represent the seller, compensated only if someone other than the seller finds the buyer (can exclude buyers)
Open Listing
nonexclusive listing given to as many brokers as seller choses, only broker who procures buyer is entitled to commission
Procuring cause
primarily responsible for bringing about a sale
start a chain of events
must be done by the procuring cause
unilateral contract
(open listing) only seller makes a binding promiseL
Local zoning ordinances may limit…
of brokerage signs placed on a property
net listing agreement
not technically listing rather a method of compensation (rare)
Multiple listing service (MLS)
database which broker members agree to cooperate by sharing listings and offering to share commissions
Selling agent
broker who procures a buyer
How does MLS benefit sellers
exposes prop to larger market w/o contracting w/ multiple brokers
How does MLS benefit Listing Agents
Engages other brokers to market the property and identify prospective buyers
How does MLS benefit Buyers
provides opportunity to avoid paying buyer’s agent if listing broker shares commission
How does MLS benefit other licensees
offers access to many more properties they can sell with an opportunity to earn a commission
Listing agreements must be…
in writing and signed to be enforceable in court (+ indicate type of agreement)
Required Elements in a Listing Agreement
- Parties to the contract
- Description of the property
- Asking price (list price)
- Term of the contract (including an end date)
- Compensation
- Scope of activities required
- Disclosure statements and other clauses
Parties
Sellers and the listing brokerage firm
Must confirm…
who owns the property and ensure party whom you are dealing is authorized to engage your brokerage
Confirming ownership: Married
both spouses should be named, even if only one spouse owns the property
Confirming ownership: Legal Entity
use the entity’s legal name (corporation, limited liability company, or trust)
Confirming ownership: Deceased
will determines the sellers or state law if there’s no will
unless signing an open listing…
confirms they do not have an active listing agreement with another brokerage firm (do not interfere)
Description of the Property
listing agreement must contain it to identify it (street address or may require legal description)
Asking Price
Seller responsible for approving, CMA, develop range of probable sales prices
Comparative Market Analysis (CMA)
method of determining the probable selling price of a property by comparing i9t to similar properties that have sold, are presently for sale, or did not sell in a given area
Term of the Contract
must indicate a specific ending date, negotiable
Automatic renewal clause
listing agreement cannot include…
Compensation
clearly explain commission, negotiated (% or flat fee)
Seller must indicate…
whether they allow broker to pay other brokers % of commission for finding a buyer and how much, negotiable (offer of cooperation)
Racial discrimination…
always against the law
Anti-discrimination/fair housing clause…
must be contained in listing agreement
Property Condition
usually included as disclosure
Residential Lead-Based Paint Hazard Reduction Act
requires disclosure of known lead paint hazards, houses built before 1978
Signatures
all parties with an ownership interest in prop must sign listing agreement as sellers
Brokers signatures
most cases, employing broker allows agents to sign on their behalf
Personal property
clarify what goes/stays
Leases
clarify what current owner leases
Advertisment
most cases, you cannot advertise property without owner’s express written consent
Optional in listing agreement: Broker Protection Clause
listing broker entitled to commission if prop sold to someone the broker introduced to the prop during certain time frame after agreement
Optional in listing agreement: Indemnification Clause
seller will hold the broker harmless for things the seller does not disclose
Optional in listing agreement: Conflicts of interest Disclosure
broker will disclose any conflicts of interest
Optional in listing agreement: Exclusive right to sell
statement that the seller won’t enter into listing contract w/ another broker during term of agreement
Optional in listing agreement: Seller Financing Arrangement
whether seller is willing to enter into any sort of seller financing arrangement
Optional in listing agreement: Earnest Money Deposit
person holding buyer’s earnest money deposit to keep uncashed check until seller accepts the offer
Optional in listing agreement: Mediation
resolve disputes before resorting to litigation
Of these, which is LEAST likely to be negotiable in a listing agreement in most states?
Whether there is a specific ending date
