12. Listing Agreements Flashcards
(53 cards)
What is a listing agreement?
A legally enforceable real estate agency agreement between a broker and a client, authorizing the broker to perform a stated service for compensation.
What laws govern a listing agreement?
Agency law and contract law.
Who are the principal parties in a listing agreement?
The listing broker and the client, who may be a buyer, seller, landlord, or tenant.
What are fiduciary duties in the context of a listing agreement?
The agent has a commitment to fulfill fiduciary duties to the client in the agreement.
What is the scope of authority in a listing agreement?
Typically a special agency that limits the broker’s authority to specific activities related to generating customers.
What is a bilateral agreement?
An agreement where both parties promise to perform certain actions, common in exclusive listings.
What is an open listing?
A non-exclusive authorization to sell or lease a property, allowing the owner to work with multiple brokers.
What is a net listing?
An agreement where the owner sets a minimum acceptable amount from the transaction and the broker keeps any excess as commission.
What is a buyer agency agreement?
An agreement that creates a fiduciary relationship with the buyer, similar to seller listings.
What is a transaction broker agreement?
An agreement where the broker is in a non-agency relationship with the seller or buyer, not bound by fiduciary duties.
What is a multiple listing?
A provision in an exclusive listing that authorizes the broker to place the listing into a multiple listing service.
What are the causes for termination of a listing agreement?
Performance, infeasibility, mutual agreement, rescission, revocation, abandonment, lapse of time, invalidity, and breach.
What is due diligence in the context of a listing agreement?
Verifying the accuracy of statements regarding the property, owner, and client’s authority to act.
What is the main item of performance for the client in a listing agreement?
Payment of compensation if the agreement calls for it.
What matters should a listing agreement address?
The amount and structure of the compensation, potential disputes over who has earned compensation, and the client’s liability for multiple commissions.
How is a broker’s commission determined?
The amount of a broker’s commission is whatever amount the client and broker have agreed to.
What forms can compensation take?
Compensation may be in the form of a percentage of the sale or lease price, or a flat fee.
What is procuring cause?
The concept that decides disputes over commissions, determining who is entitled to the commission based on who found the customer.
What are the two principal determinants of procuring cause?
- Being first to find the customer. 2. Being the one who induces the customer to complete the transaction.
Give an example of procuring cause.
Broker A shows Joe the property on Monday, and Broker B shows Joe the same property on Friday. Joe buys the property, and Broker A will probably be deemed the procuring cause.
This is because Broker A first introduced Joe to the property.
How is compensation for buyer brokers typically structured?
Buyer agency agreements stipulate compensation as a client-paid retainer fee or a commission contingent upon a completed transaction or procured seller.
Who typically pays the buyer broker’s commission?
It is common for the agent to be paid by the seller, but the buyer may pay if the seller refuses to offer compensation.
When is the commission typically earned?
The commission is customarily earned when a sales contract is completed by the transacting parties.
What are some causes for termination of a listing?
- Performance 2. Infeasibility 3. Mutual agreement 4. Revocation 5. Abandonment 6. Breach 7. Lapse of time 8. Invalidity of contract 9. Incapacitation or death of either party 10. Involuntary title transfer 11. Destruction of the property.
