Unit 6: Listing Presentation and Listing Contracts

Question 1

Listings Are Contracts
They require:

Answer 1

• Legal purpose
• Consideration
• Competent parties
• Mutuality (meeting of the minds)

In addition, real estate listing must be in writing for the
agent to be entitled to a commission.

Question 2

What are the types of Listing Agreements?

Answer 2

• Open listing
• Net listing
• Exclusive-agency listing
• Exclusive-authorization-and-right-to-sell
• Exclusive authorization to locate property

Question 3

Open Listing

Answer 3

• An open listing is considered a unilateral contract.
  The owner agrees to pay a commission to the
  broker who procures a buyer.
• Most brokers refuse open listings because it can result in a lot of work and problems while still resulting in no commission.

Question 4

Net Listing

Answer 4

In a net listing, the broker is entitled to all monies
in excess of a net price (listing price). If the
property sells at listing price or less, the broker
gets no compensation.

• Net listings are seldom used. Agents are
  vulnerable to charges of fraud,
  misrepresentation, and other abuses.

Question 5

Exculsive Agency Listing

Answer 5

* Maybe no commission
– The owner agrees that the listing agent will be
the owner’s sole agent.
– If the listing agent or any other agent sells the
property, the listing agent will have earned his
or her commission.
– If the owner finds a buyer without the agent,
the agent is not entitled to a commission.

Question 6

Exclusive-Authorization-and-Right-to-
Sell Listing

Answer 6

• The listing agent is the only party authorized
  to locate a buyer.
• If the listing agent, any other agent, the
  owner, or anyone else procures a buyer while
  the listing is in force, the agent will have
  earned a commission.

Question 7

Termination Date/Copies

Answer 7

• Exclusive listings must have a definite
  termination date for the agent to be entitled
  to a commission. Failure to include a definite
  termination date is grounds for disciplinary
  action.
• The agent must give the owner a copy of any
  exclusive listing at the time it is signed.

Question 8

Exclusive Authorization to Locate
Property

Answer 8

• This is a buyer’s listing, where the real estate agent will
  find the buyer a property.
• The commission can be paid by either buyer or the
  seller.
• The buyer’s broker owes the same standard of
  performance in serving the buyer as the listing broker
  owes to the seller.

Question 9

What listing agreement benefits the seller the most?

Answer 9

An exclusive-authorization-and-right-to-sell listing gives the broker the greatest assurance that he or she will receive compensation for his or her marketing efforts. And as a result, sellers usually see a quicker and more profitable sale of the property.