SUMMARY: Ch 2.3: Listing Agreement Provisions

Question 1

Termination

Answer 1

A listing agreement will terminate on its expiration date or when the sale of the property closes.

It will also terminate if the broker dies, goes out of business, or has her license suspended or revoked.

The seller and the broker may mutually agree to terminate the listing, or one party may decide to terminate the agreement on his own.

However, if one party terminates the listing agreement unilaterally, he may be liable for breach of contract.

Question 2

Commission Rate

Answer 2

The commission rate must be fully negotiable. There can be no “mandatory” or “standard” rate of compensation.

California law requires that the listing agreement contain a notice in boldface type that commission rates are negotiable.

Question 3

Offer of cooperation clause

Answer 3

authorizes you to cooperate with other agents, and allows your broker to compensate cooperating brokers through a commission split.

allows the cooperating brokers’ compensation to be stated as a percentage or as a flat amount.

Question 4

T/F: If you need to extend the expiration date of a listing, the best practice is to use an amendment addendum form and have it signed by the sellers and the listing agent.

Answer 4

True

Changes to the listing agreement require written consent of the sellers and the listing agent. Although it may be possible to make the change on the original listing agreement form, it is best to use and amendment addendum.