Listings

A Listing is a Bilateral Employment Contract between principal and broker whereby the broker is employed by the principal to find a buyer and accept a deposit.   It is the most essential element of an enforceable broker-principal relationship.


The duration for a listing may be for any length of time agreed to by both the broker and the seller.


A listing agreement is a personal service contract.

Should the principle or seller die, or either party becomes incapacitated or the property is physically destroyed, such as by a fire or a natural disaster, the listing agreement is terminated.

The listing could also be terminated by condemnation.


The broker and seller may mutually agree to end the listing agreement. For example, if a seller’s company is no longer transferring her to another city, the broker and seller can mutually agree to release each other from the listing.


Both the broker and seller have mutual responsibilities. Should a party breach their duty, the other party can terminate the listing. The broker is responsible for advertising a property. If the broker fails to advertise the property, the seller could terminate the listing. Should the seller file bankruptcy, the listing contract would end by operation of the law. The listing would also expire if the brokerage could not find a ready, willing and able buyer.


A material change is something that would affect the value of the listed property. For example, when a property was listed it was zoned residential. At the last zoning board meeting, the property was changed to a commercial zone. This material change would terminate the listing agreement.


Most listing contracts have a specific ending date. It can be as simple as: “This contract will begin at 1 p.m. on Jan. 1, 2010 and it will end at midnight on Aug. 8, 2010.”


A listing contract contains many elements.  You would want your listing to contain the following:

- Names of the parties to the contract

- The type of agency created

- The broker’s authority and responsibilities

- The location of the property, which may be a street address

-  Legal description or tax parcel number

- The listing price

- Beginning and ending dates

- Real and personal property included

- The commission to be paid

- Authorization to advertise including the placement of a For Sale sign on the property

- Type of deed used for conveyance

- The terms for termination of the contract

- An indemnification clause

- Fair housing and anti-trust information

- The signatures of parties authorized to perform

- The protection period clause


The protection period clause is also known as an extender or carry-over clause.  The purpose of this clause is to able to close deals with buyers you found during the term of the listing.


For example, let’s say that last week you showed a property to buyers and they did not make an offer. The listing expired last night, and today the buyers called and want to make an offer. You call the seller and ask if he has listed with another company. He replies, “No.” You ask if he is still interested in selling, and he says, “Yes.” If the buyer’s offer were accepted, your company would still be due a commission, even though the listing has expired.


Types of Listings contracts


In an Exclusive Listing only one agent can be hired.  It requires a specific termination date (not 90 days from the completion of construction, rather 90 days from signing).  If two exclusive listings are signed, the seller could be liable for two commissions. 

Exclusive Listing

In exclusive Listing, one agent is hired, therefore there is one commission however that commission can be shared with an agent that brings a buyer.  The way that the commission is being divided must be disclosed to the seller.


Exclusive Authorization and right to sell Listing

Exclusive Authorization and Right to Sell Listing is a contract where the Owner agrees to sell the property in question through the Listing Broker. The Listing Broker does not need to show that he is the “Procuring Cause” of the buyer.  The agent gets paid no matter who brings the buyer as long as the property sells in the agreed upon fashion.


This is when you see a broker for sale sign in the front yard.  Only that broker is trying to solicit the buyer. This is what most people are accustomed to seeing.


Exclusive Agency Listing

Exclusive Agency Listing is a contract where the Seller agrees to pay one Listing Agent a commission. However if the owner sells it themselves the agent gets no commission.  Thus the agent would have to prove they were the procuring cause of the buyer.


Imagine there was a brokers for sale sign in the front yard and right next to it there was a For Sale by Owner sign to it.


Open Listing

An example of an open listing would be a builder/developer who hires an employee or site representative to sell homes in a subdivision.


The developer also enters into open listings with brokerage firms in the area.


So, if the developer or the employee finds the buyer, the broker does not receive a commission.


Whoever is the procuring cause of the buyer is due a commission.  As long as they are either the principle in transaction or have an active real estate license.  It is not exclusive to anybody.


Imagine a home with multiple For Sale signs by different brokerage firms in the front yard.


This is an open listing and whoever sells the property gets the commission.


Net Listing

A net listing is when an agent agrees to sell an owner’s property for a set minimum price. Anything over the minimum price belongs to the agent as commission. Thus, in a net listing, there’s no stipulated selling price and no stipulated commission.


For example, a property owner wants to obtain $500,000 for their property.

If the agent sells it for $550,000, they made $50,000.

If the agent sells it for $500,000 the agent makes nothing.


This is why the agent would have to manipulate the list price in order to earn a commission, making why it is illegal in most states.


Listings with an option

If a broker is interested in buying a property that she or he has listed, this provision needs to be included in the listing agreement.


It is legal for an agent or broker to buy listed property. Most states require licensees to disclose that they have a license before an offer is made on any property that they are interested in purchasing. Many states require this disclosure to be in writing, and they may also require the disclosure of the broker’s profit in the transaction.


Multiple listing service

Multiple listing service, or MLS, is not a type of listing contract but a joint marketing agreement between brokerage firms to make their listings available to other brokerage firms. Before a property can be placed in the MLS, the broker must have the seller’s written consent to do so. Communications, such as setting an appointment to show the property, must take place through the listing brokerage, not the MLS.

Introduction

Bundle of Rights  

License   

Government Rights  

Police Power   

Eminent domain   

Taxation   

Escheat   

Real vs Personal Property

Annexation   

Appurtenances   

Fixtures   

Trade Fixture   

Emblements   

    OR-EE Rule   

Estates

Freehold Estate   

Fee simple absolute   

Fee simple Defeasible   

Life estate   

Less than freehold estate   

Estate for Years   

Periodic Tenancy   

Estate at will   

Estate in sufferance   

Types of Leases   

Gross lease   

Net lease   

Percentage lease   

Lease option   

Property management

Contracts

Essentials of a valid contract   

Capable parties  

Lawful object   

Consideration   

Offer and acceptance   

Types of Contracts   

Valid, Void & Voidable Contracts   

Implied contract   

Bilateral & Unilateral contacts   

Executed & Executory   

Option contract   

Land Contract   

Listings   

Types of Listings contracts   

Exclusive Listing   

Exclusive Authorization and right to sell Listing   

Exclusive Agency Listing   

Open Listing   

Net Listing   

Listings with an option   

Multiple listing service   

Agency   

Universal agent   

General agent   

Special agent   

Attorney in fact   

Principal and Client   

Transaction broker   

Dual or limited agency   

Practice and disclosure   

Stigmatized property   

Puffing   

Fraud   

Actual fraud   

Negative fraud   

Constructive fraud   

Negligence   

Federal Law   

Truth in Lending   

Fair Housing   

Steering   

Blockbusting   

Sherman antitrust laws   

Easement   

Easement in gross   

Implied easement   

Prescriptive easement   

Termination of Easement   

Encroachment   

Zoning

Property Transfer

    Deeds   

    Wills   

Title   

Title insurance   

Forms of ownership   

Tenancy in common   

Joint tenancy   

Community property   

Trust   

Subdivisions   

Condominium   

Cooperative   

Time Shares   

Cluster housing   

Liens   

Appraisal   

Appraisal Principles   

Principle of Highest and Best Use   

Principle of Substitution   

Principle of Conformity   

Principle of Contribution   

Principle of change   

Market Value   

Steps in the appraisal   

Appraisal methodology   

Market data approach   

Capitalization (income) Approach   

Cap Rate   

Cost (replacement) approach   

Gross Rent Multipliers   

Depreciation   

Physical Deterioration   

Functional Obsolescence   

Economic Obsolescence   

Financing   

Lenders   

Primary mortgage   

FHA   

VA   

Types of Loans   

Loans clauses   

Investing   

Construction Terms   

Test Taking Tips