Types of listings Flashcards
Buyer Representation Agreement:
A document that creates agency between a broker and a buyer
Arbitration:
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
Open Listing:
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
Exclusive Right to Sell Listing:
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
Exclusive Agency Listing:
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
The most widely used listing agreement form, titled Residential Real Estate Listing Agreement Exclusive Right to Sell, comes from the
the Texas Association of REALTORS®
It should also be noted that a lot of brokerages don’t allow
Open listings
most brokers will not spend any of their funds on an open listing due to
The fact that the company might not receive a commission.
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.
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
sell the property on their own without facing liability for a commission payment.
an open listing may be terminated at
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.
MLS systems do not allow agents to put open listings
In their system
Then there are pocket listings, or listings that
do not appear on the MLS.
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
secured by the sellers’ agent and when it shows up on the MLS.
A pocket listing can also happen when an owner wants
to privately sell their house.
An exclusive right to sell listing agreement also grants the broker
the authority to advertise the property for sale.
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
part of the commission if the listing broker agrees to it.
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,
the seller would still owe the listing company a commission.
Real estate professionals generally prefer exclusive
right to sell listings over other listing agreements.
An agent with an exclusive right to sell listing is more
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).
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
Exclusive agency listing
Exclusive agency listings combine elements of
open listing agreements and exclusive right to sell agreements.
As with open listings, exclusive agency listings release
the owner from any obligation to pay a commission in the event the owner secures the sale of their property.
As with an exclusive right to sell listing, the seller agrees to list the property with
Only one broker
The distinguishing characteristic of exclusive agency listings is that the
named listing broker is owed commission only if the property is sold by someone other than the owner — including the listing broker.
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
the broker receives the difference, or net (the dollar amount above what the owner wants) as their commission.
Net listings should only be taken if
the client insists on it and is familiar with current market values.
Most brokers would likely be more comfortable if the sales agent could turn net and open listings into
Exclusive rights to sell listings
TREC Rule on Net Listings
§535.16 Listings; Net Listings
1. A broker is obligated under a listing contract to negotiate the best
possible transaction for the principal the broker has agreed to represent.
TREC rules on net listings
- A “net listing” is a listing agreement in which the broker’s commission is the difference (“net”) between
the sales proceeds and an amount desired by the owner of the real property.
TREC rules of net listings
A broker may not take net listings unless the principal
requires a net listing and the principal appears to be familiar with current market values of real property.
TREC Rule on Net Listings (cont.)
- A real estate license holder is obligated to provide a
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.
The Texas Real Estate Commission requires two actions to take place before a license holder may take a net listing.
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.
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
Residential Real Estate Listing Agreement Exclusive Right to Sell, comes from the Texas Association of REALTORS®.
The seller discloses information about the property’s condition with the
Sellers disclosure notice
A material fact in a real estate transaction is any fact that is
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.
Mandatory HOA membership must always
be disclosed in Texas. It is done through the Addendum for Property Subject to Mandatory Membership in a Property Owners Association.
The cooperating broker is a broker or sales agent who
shows the listed property to a buyer who subsequently purchases the property.
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
Listing broker
