Types of listings

Question 1

Buyer Representation Agreement:

Answer 1

A document that creates agency between a broker and a buyer

Question 2

Arbitration:

Answer 2

A conflict resolution technique that requires a third party in the room to make a final decision on the best method of resolving the conflict

Question 3

Open Listing:

Answer 3

An agreement that allows multiple real estate brokers (and the owners themselves) the right to sell the property with the individual considered the procuring cause of the sale of the property getting the commission

Question 4

Exclusive Right to Sell Listing:

Answer 4

A listing agreement which gives the agent the sole right to sell the property and guarantees that the broker receives a commission if the property is sold, even if the seller brings the buyer themselves

Question 5

Exclusive Agency Listing:

Answer 5

A listing agreement in which the owner retains the right to sell the property themselves without paying a commission, or the commission will be paid to the named broker if the broker or any other party sells the property

Question 6

The most widely used listing agreement form, titled Residential Real Estate Listing Agreement Exclusive Right to Sell, comes from the

Answer 6

the Texas Association of REALTORS®

Question 7

It should also be noted that a lot of brokerages don’t allow

Answer 7

Open listings

Question 8

most brokers will not spend any of their funds on an open listing due to

Answer 8

The fact that the company might not receive a commission.

Question 9

Open listings allow a seller to list their property concurrently with a number of

Answer 9

competing brokers or offer to pay anyone bringing them a buyer.

Question 10

Open listings allow a seller to list their property concurrently with a number of competing brokers or offer to pay anyone bringing them a buyer. It also gives them the option to

Answer 10

sell the property on their own without facing liability for a commission payment.

Question 11

an open listing may be terminated at

Answer 11

any time before performance and releases the seller from any obligation to inform the other listing brokers when the property goes under contract or is closed.

Question 12

MLS systems do not allow agents to put open listings

Answer 12

In their system

Question 13

Then there are pocket listings, or listings that

Answer 13

do not appear on the MLS.

Question 14

It can get a little more complicated than that, though. A listing is also considered a pocket listing in the time between when it is

Answer 14

secured by the sellers’ agent and when it shows up on the MLS.

Question 15

A pocket listing can also happen when an owner wants

Answer 15

to privately sell their house.

Question 16

An exclusive right to sell listing agreement also grants the broker

Answer 16

the authority to advertise the property for sale.

Question 17

By creating exclusive right-to-sell listing, the agent’s brokerage has the one true claim to a commission on the sale. Someone else could technically sell the place, but they would only receive

Answer 17

part of the commission if the listing broker agrees to it.

Question 18

Exclusive Right to Sell Listings

It doesn’t matter if the listing company sells the place or if the owner does or if the agent down the street ends up selling it. According to the agreement,

Answer 18

the seller would still owe the listing company a commission.

Question 19

Real estate professionals generally prefer exclusive

Answer 19

right to sell listings over other listing agreements.

Question 20

An agent with an exclusive right to sell listing is more

Answer 20

incentivized to find the highest bid possible for the seller because they are guaranteed a commission (which is most likely a percentage of the sales price).

Question 21

The Texas Association of REALTORS® has created an addendum to the exclusive right to sell listing agreement (appropriately named the Exclusive Agency Addendum to Listing) that would turn the document into an

Answer 21

Exclusive agency listing

Question 22

Exclusive agency listings combine elements of

Answer 22

open listing agreements and exclusive right to sell agreements.

Question 23

As with open listings, exclusive agency listings release

Answer 23

the owner from any obligation to pay a commission in the event the owner secures the sale of their property.

Question 24

As with an exclusive right to sell listing, the seller agrees to list the property with

Answer 24

Only one broker

Question 25

The distinguishing characteristic of exclusive agency listings is that the

Answer 25

named listing broker is owed commission only if the property is sold by someone other than the owner — including the listing broker.

Question 26

In a net listing, the seller names an amount they want the property to sell for, and the broker tries to sell it for more than that. This is because

Answer 26

the broker receives the difference, or net (the dollar amount above what the owner wants) as their commission.

Question 27

Net listings should only be taken if

Answer 27

the client insists on it and is familiar with current market values.

Question 28

Most brokers would likely be more comfortable if the sales agent could turn net and open listings into

Answer 28

Exclusive rights to sell listings

Question 29

TREC Rule on Net Listings

§535.16 Listings; Net Listings
1. A broker is obligated under a listing contract to negotiate the best

Answer 29

possible transaction for the principal the broker has agreed to represent.

Question 30

TREC rules on net listings

2. A “net listing” is a listing agreement in which the broker’s commission is the difference (“net”) between

Answer 30

the sales proceeds and an amount desired by the owner of the real property.

Question 31

TREC rules of net listings

A broker may not take net listings unless the principal

Answer 31

requires a net listing and the principal appears to be familiar with current market values of real property.

Question 32

TREC Rule on Net Listings (cont.)

3. A real estate license holder is obligated to provide a

Answer 32

broker price opinion or comparative market analysis on a property when negotiating a listing or offering to purchase the property for the license holder’s own account as a result of contact made while acting as a real estate agent.

Question 33

The Texas Real Estate Commission requires two actions to take place before a license holder may take a net listing.

Answer 33

The agent must give the seller an opinion of value for the property.

The seller must insist that they want to sell using a net listing.

Question 34

The listing agreement outlines the relationship between the involved parties, what’s expected of them, and how the broker will be paid. This form, titled

Answer 34

Residential Real Estate Listing Agreement Exclusive Right to Sell, comes from the Texas Association of REALTORS®.

Question 35

The seller discloses information about the property’s condition with the

Answer 35

Sellers disclosure notice

Question 36

A material fact in a real estate transaction is any fact that is

Answer 36

significant or essential to the transaction – that is, any piece of information that could reasonably be expected to influence a prudent individual’s decisions regarding the transaction.

Question 37

Mandatory HOA membership must always

Answer 37

be disclosed in Texas. It is done through the Addendum for Property Subject to Mandatory Membership in a Property Owners Association.

Question 38

The cooperating broker is a broker or sales agent who

Answer 38

shows the listed property to a buyer who subsequently purchases the property.

Question 39

This entitles the cooperating broker to the fee or commission for being the “procuring cause” of the sale. The amount offered to a cooperating broker is at the sole discretion of the

Answer 39

Listing broker