Unit 8 - Agency Contracts Flashcards
An employment contract between a property owner (as principal) and a real estate firm/broker (as agent) by which the broker is employed to find a ready, willing and able buyer for the owner’s real estate on the owner’s terms, for which service the owner agrees to pay a commission.
listing agreement
A document evidencing formal employment between employer and employee or between principal and agent. In real estate, this is generally a listing agreement, a buyer agency agreement or a management agreement.
employment contract
A national registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who prefer to limit the telemarketing calls they receive.
National Do Not Call Registry
Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition.
antitrust laws
Brokers conspiring to set fixed compensation rates
price fixing
Brokers agreeing to limit their areas of trade or dealing to certain areas or properties
allocation of customers or markets
One who is prepared to buy property on the seller’s terms and is ready to take positive steps to consummate the transaction; one of the agent’s requirements for entitlement to commission.
ready, willing, and able buyer
The effort that began a chain of events that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission.
procuring cause
A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency.
buyer agency agreement
A small fee paid by the client upon creation of a buyer agency relationship as an advance partial compensation for services; it may be nonrefundable or applied to final compensation due depending on the agency agreement.
retainer fee
Compensation that is due and payable upon the creation of a valid sales contract for property located by the buyer’s agent.
success fee
A real estate transaction involving two or more brokerage firms, one firm representing the seller and the other representing the buyer.
co-brokered sale
Two brokerage firms teams up to sell a property, usually to create more effective marketing for the listing client.
co-listing
A listing agreement under which the broker’s commission is contingent on the broker personally producing a ready, willing, and able buyer before the property is sold by the seller or another broker.
open listing
A listing contract under which the owner appoints a real estate broker as the exclusive agent for a designated period of time to sell the property, on the owner’s stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission if the owner sells to a prospect who has not been introduced or claimed by the broker.
exclusive-agency listing
A listing contract under which the owner appoints a real estate broker as the exclusive agent for a designated period of time to sell the property, on the owner’s stated terms, and agrees to pay the broker a commission when the property is sold, regardless of who sells the property.
exclusive right-to-sell listing
An agreement between an unlisted property owner and a broker to secure payment for the broker if the property is sold to the particular buyer named in the agreement; it does not create a general listing and may not create agency at all - only compensation for a buyer’s agent.
protection agreement AKA
one-shot listing
Arrangement where consumer asks licensee to perform specific real estate services for a set fee; unbundling of services; limited service firms.
fee-for-service agreement
A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most accept only exclusive right-to-sell or exclusive-agency listings from their member brokers.
multiple listing service (MLS) AKA
cooperative listing service (CLS)
The length of property along the street or waterfront.
frontage
A listing based on the net price the seller will receive if the property is sold. The broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is illegal in many states - it is legal but not encouraged in North Carolina.
net listing
Written agency agreements must: (4)
- Be signed by all parties;
- include the broker’s real estate license number;
- have a definite termination date; and
- contain the prescribed non-discrimination provision
Full service listing contracts (3)
- Open
- Exclusive Agency
- Exclusive-right-to-sell
A carry-over or protection clause in a listing contract that says the listing broker is entitled to commission for a time period after expiration of the listing term if the property is transferred to a prospect that the broker introduced to the property during the listing term; override clause. The clause is void if the property is listed with another broker.
extender clause AKA override clause
