Unit 6: Listing Presentations and Listing Contracts

Question 1

Elements of a contract

Answer 1

competency of parties, lawful object, proper offer and acceptance (mutual consent), and consideration.

Question 2

To be enforceable, contracts must:

Answer 2

in writing

Question 3

Consideration in a listing contract is

Answer 3

the broker’s promise to use “due diligence in locating a ready, willing, and able buyer” in exchange for the seller’s promise to pay a commission or the agent’s promise to locate a property for a buyer with compensation paid by the buyer or seller.

Question 4

Bilateral Agreement

Answer 4

The promise (seller or buyer to pay commission) given for a promise (broker to use diligence in finding a buyer/property.

Question 5

3 Types of Listing Agreements

Answer 5

1) Open Listing
2) Exclusive- Right-to-Sell Listing
3) Exclusive- Agency Listing

Question 6

Open Listing

Answer 6

(Procuring Cause) A nonexclusive written memorandum that when signed by the seller or buyer, authorizes the broker to serve as an agent for the sale or purchase of the property. Under an open listing, the owner agrees to pay a commission if the broker procures a buyer or property that is purchased. Because the broker is not obligated to use due diligence to locate a buyer or property, an open listing is considered to be a unilateral contract. (Many Signs)

Question 7

What type of contract is an open listing?

Answer 7

Unilateral Contract

Question 8

Exclusive- authorization-and-right-to-sell listing

Answer 8

(most common) Entitles the listing agent to the compensation, no matter who sells the property. (Only one sign)

Question 9

Exclusive Agency Listing

Answer 9

Same as Exclusive Authorization and Right to sell listing but if the seller finds a buyer, the broker doesn’t get paid. (Agent and Seller can have signs)

Question 10

Both types of exclusive listings must contain

Answer 10

A definite termination date

Question 11

Safety Clause

Answer 11

Allows for a commission even after the listing expires for a period of time that you set in the contract.

Question 12

The listing contract must contain a disclosure that says:

Answer 12

(10-point font, Bold typeface) Compensation is negotiable

Question 13

Hold Harmless Provision

Answer 13

If the seller lies to you, they will protect you. Blatant defects that you should have seen don’t count.

Question 14

Net Listing

Answer 14

The commission is not set. The seller sets a sale price, anything above that set amount goes to the agent.

Question 15

Option Listing

Answer 15

Gives you the option of buying the property.

Question 16

Disclosures to the seller if you buy your own listing

Answer 16

1) Acting as a Principle
2) Profit
3) Other Offers

Question 17

3 Steps to prepare for the listing

Answer 17

Step 1: Obtain information about the property
Step 2: Prepare your comparative market analysis (CMA)
Step 3: Drive by the current and expired listings and by the property that has sold

Question 18

Short Sale

Answer 18

The lender agrees to accept sale proceeds as settlement of the loan obligation

Question 19

A valid exclusive listing requires:

Answer 19

A lawful purpose, mutual consent, and consideration

Question 20

An agent sold a property where the owner had verbally agreed to pay a commission. The agent would be legally entitled to a commission from the owner for the sale if the agent had:

a) relied on the verbal promise
b) made a written memorandum of the agreement signed by the agent
c) obtained a valid buyer listing agreement
d) none of the above

Answer 20

d) none of the above. A verbal listing is unenforceable.

Question 21

Which listing would you be LEAST likely to advertise?

Answer 21

An Open Listing. If an open listing is sold by any other party, the listing broker is not entitled to any compensation. This makes it least attractive to a broker and the least likely to be advertised.

Question 22

A listing under which the owner can sell the listed property without payment of a commission but the agent is nevertheless an exclusive agent is an:

Answer 22

Exclusive-agency listing

Question 23

An agent who did not obtain a purchase offer but who initiated an uninterrupted chain of events that led to a sale would be considered the:

Answer 23

Procuring Cause. Would be entitled to commission if there was a valid listing.

Question 24

An exclusive-right-to-sell listing likely includes:

Answer 24

1) Agency Relationship Disclosure
2) Attorney Fee Provision
3) Arbitration Agreement

Question 25

True or False: In an Exclusive- Right- To- Sell listing, the agent is precluded from working with other agents to sell the property.

Answer 25

False: The agent is not precluded from working with other agents to sell the property

Question 26

The type of listing that has the greatest likelihood of resulting in a sale would be a(n):

Answer 26

Exclusive-right-to-sell listing as it has the best outcome for the agent’s work. Provides the best incentive.