Listing Contracts Flashcards
What happens when a seller makes a counteroffer to a buyer’s original offer?
The original offer terminates and the counteroffer in effect becomes a new offer.
What is a contingency and what is the most common contingency?
A contingency is a condition that must be met before the contract is enforceable. The most common contingency concerns financing.
What does the escrow clause in a sales contract do?
It provides for the custody and disbursement of the earnest money deposit, and releases the escrow agent from certain liabilities in the performance of escrow duties.
The relationship between the tenant and the landlord is called what?
Tenancy
What is an important thing to remember about the enforceability of listing agreements?
They must be in writing to be enforceable.
Describe an open listing.
An open listing is a non-exclusive listing that allows a seller or buyer to engage a number of different brokers to sell or help purchase property. The broker who brings the buyer or finds the suitable property gets the commission. If the owner sells the property or the buyer finds his or her own property, no commission is owed to any broker.
What is the major difference between an exclusive right to sell listing and an exclusive agency listing?
With exclusive right to sell, the broker has the exclusive right to market the property and receive a commission regardless of who procures the buyer. With exclusive agency, the owner retains the right to find a buyer and sell the property and owe the exclusive broker no commission.
How does a net listing create a conflict of interest for a broker?
It violates the broker’s fiduciary responsibility of putting the client’s interests above his or her own.
List three common misconceptions concerning buyer agency.
Buyer agency must be created by written agreement to be lawful.
Buyer agency is too complicated for the average buyer or seller to understand.
Buyer agency is not recognized by lenders.
Buyer agency increases the risk of procuring cause disputes.
Buyer agency is illegal.
Buyer agency is prohibited by State laws or MLS rules.
Buyer agency does not permit the seller to pay the commission or allow the listing broker to split commissions with the buyer’s agent.
The buyer’s agent should mention the potential need for the buyer to consult with whom?
Other expert advisors such as attorney, CPA, etc.
Agents know that an exclusive-right-to-sell or exclusive-right-to-buy agreement provides what?
Better control over the transaction
Unnecessary risks are taken when brokers do what with buyer agency agreements?
Write their own agreements
Listing Agreement
a contract between a property seller and a broker or principal broker which authorizes the broker to act as an agent of the seller for compensation to offer the real property for sale or to find and obtain a buyer.
Buyer rep agreement
the document a prospective buyer signs once he or she decides to work with a buyer’s agent at a particular brokerage.
The mutual consent needed for a contract to be valid is reached through the process of
Offer and Acceptance
In a typical real estate transaction, the buyers start the process by
making an offer using a purchase and sales contract form. The buyers can withdraw this offer any time before it is accepted by the sellers.
The sale contract provides the
escrow instructions for handling and disbursing escrow funds. The earnest money is placed in a third party trust account or escrow. A licensed escrow agent employed by a title company, financial institution, or brokerage company usually manages the escrow.
Contingency
a condition that must be met before the contract is enforceable
A typical residential sale contract contains
the following kind of provisions. Parties, consideration, and property.
A Lease
is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset.
Listing Agreement
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.
Most listing agreements are bilateral employment contracts
meaning that the owner hires the broker and promises to pay a commission in exchange for the broker’s promise to locate a “ready, willing and able” buyer or tenant for the owner.
Texas Real Estate License Act
states that only brokers may list, sell or rent property. Agents have authority to list, but all listings must be done in the name of a licensed broker
Open Listing
is a non-exclusive contract, authorizing a broker to serve as the agent for either the sale or the purchase of property.
Net Listing
is not technically a type of listing agreement. In a net listing, 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.
The buyer’s agent should mention the potential need for
the buyer to consult with other expert advisors, such as CPA, attorney, etc.
Agents know that an exclusive-right-to-sell or exclusive-right-to-buy agreement provides
Better control over the transaction
Buyer’s brokers frequently develop their own buyer agency agreements
Brokers who draft their agreements without legal counsel may be taking unnecessary risks.
Regarding Texas licensing laws and the common law
the buyer’s agent is held to a higher standard of skill and care in working with the buyer than is a subagent of the seller or the seller’s listing agent, who works with the buyer on a customer basis.
Buyer’s agents have an affirmative duty to their clients to
thoroughly investigate and completely disclose all facts that rely on a buyer’s decision to buy.
A buyer’s agent is held to the same standard of performance in dealing with the buyer
that the listing broker is held to in dealing with the seller.
The agent who ultimately caused the buyer to purchase the home and earned the commission is generally the
Procuring cause agent
A buyer could sign an exclusive buyer agreement with one agent, but
the second agent who closes the transaction, depending on circumstances, could end up earning the commission
