Unit 1: Listing Agreements

Esther is thinking of signing an exclusive right-to-sell agreement with broker Sully, but first she asks, "What kinds of things does this agreement cover?" How should Sully answer?

"It includes a description of the property you're selling and my obligations to you, such as my duty to assist in negotiations."

Dawn is a real estate licensee working with Midge, a buyer. If Dawn were trying to explain the advantages of a buyer representation to Midge, what could she say?

"Without a written representation agreement, I don't represent you."

"I understand why you want a buyer representation agreement," your buyer tells you. "But what's in it for me?" You answer:

"Without it, you're unrepresented."

Now that you know what a net listing is, let's see if you can identify one. Which is an example of a net listing agreement?

A seller wants to sell the property for at least $400,000. If the property sells for more, the agent can take anything above that number.

Certain actions are required of the listing agent. Identify each of these actions as required or not required of the listing agent.

Act with honesty and integrity toward clients and the general public. Use reasonable skill and care with all parties in the transaction process. Disclose any material and relevant facts to all parties in the transaction as soon as possible. Disclose all compensation sources to all parties involved in the transaction as soon as possible. Comply with all laws, regulations, statutes, and obligations established by federal, state, and local governments.

Exclusive right-to-sell agreemnet

Allows the listing agent to list the property and receive a commission no matter who brings the buyer to the table.

Open listing agreement

An agreement that allows sellers to contract with multiple agents but only pay a commission to the agent who locates a buye

Exclusive agency agreement

An agreement that allows sellers to work with an agent while still trying to locate the buyer themselves

Where is the best place to hold a sit-down meeting with a new buyer client?

At your office

Conducting an effective buyer presentation helps to establish a good foundation with a prospective buyer client. When preparing for a buyer presentation, what main purpose should you keep in mind?

Build trust

Joins agent representation and self-representation

Exclusive agency

Larry Gray is selling the home he grew up in. A former childhood friend, Rick, always told Larry to look him up if he ever sells the house. Larry wants to give his old pal an opportunity to purchase the home, but also wants it to be marketed by an agent. It doesn't really seem right to pay the agent a commission if Rick is the buyer, so Larry signed this type of contract with his agent.

Exclusive agency

Different types of listing agreements licensees can create with sellers. Three are considered standard:

Exclusive agency Exclusive right-to-sell Open (aka non-exclusive)

Offers the highest level of representation.

Exclusive right to sell

When working with a seller, you signed a listing agreement that ensured you'd receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?

Exclusive right to sell

Which of the following agreements gives you the sole right to represent a buyer?

Exclusive right-to-represent agreement

Which of the following is the most common type of buyer representation agreement?

Exclusive right-to-represent agreement

Gerald wants a real estate agent that's going to work hard for him, and he's willing to pay the agent no matter who brings the buyer to the table. What type of agreement is in place?

Exclusive right-to-sell

As soon as potential buyers contact Amelia, she sets them up to receive weekly emails with listings that fit what they're looking for. The thing is, they hardly ever get in touch with her after that. What's the best thing Amelia could do to improve her likelihood of sealing the deal?

Have an in-person buyer presentation meeting.

Why might you opt out of working with a buyer unless you're working under an agency agreement?

Having an agency agreement allows you to represent the buyer's interests.

Which of the following activities are included in the buyer representative's role?

Helping schedule the home inspection Showing properties Preparing and presenting buyers' offers Contacting the lender to make sure the loan is in process Attending closing

which of these questions will help keep you out of legal hot water while determining if the buyer is serious?

How did you get my name? How long have you been looking for a home? Do you need to sell your current home before you can buy? Are you pre-approved for a loan?

When buyers contact you for the first time, why is it important to ask how they found you?

It can help you determine what additional questions to ask.

What three things could you say to prospective clients who don't want to come in for a meeting?

It is part of my service to meet with my buyers before we begin to work together. This avoids misunderstandings down the line. It is my policy to meet before we begin working together. It will help me serve you better if we can put faces to our voices. I have a short client questionnaire that will really help me drill down on your needs and will save us from looking at the wrong types of properties.

Without the broker's permission, a seller terminated a listing agreement before the date stated in the contract. What two things might the seller owe?

Marketing and advertising expenses to date Full commission if a ready, willing, and able buyer were found

Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?

Multiple listing clause

True statements about net listing

Net listings are illegal in some states. Net listings can lead to conflicts of interest.

Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. Can he do so without penalty?

No, because the listing agreement is contractually binding.

What is an open listing agreement?

One in which only the person who finds the buyer gets paid

You represent seller April, who is your Uncle Clyde's girlfriend. You receive an offer from Barry on behalf of a prospective buyer. Whose interests do you represent, and in what order?

Only April's

Limits the amount of representation received from any one professional in exchange for the flexibility to work with multiple agents.

Open agency

The Damons are selling their home. Thinking that it'll help them cast the widest net of prospective buyers, they have agreements with Bill, Jan, and Paul, all of whom work with different brokers. Only the lucky dog who brings the buyer to the table gets the 5% commission the parties agreed to. What type of agreement is in place?

Open listing

Read the statements and select the three items for which you'll need the seller's express permission.

Post the listing to the MLS. Place a lockbox on the property. Install a for sale sign on the property.

responsibilities of a listing agent

Present all offers to the client as soon as practical. Maintain client confidentiality. Remain loyal to the client. Advise the client when to obtain advice from another professional.

Who are the parties to a listing agreement?

Property sellers + their agent

As the seller's representative in a real estate transaction, you'll have several duties, many of which are outlined in your resources. What are some of these?

Put the property on the market. Advertise and market the property to attract buyers. Assist the seller through the transaction. Protect the seller's interests throughout the process.

When working with new buyers, it's important to qualify the buyers before devoting too much time to them. What type of qualifying is important?

Readiness

You've done everything we suggested. You asked the right questions, followed the tips, asked for a signature on the buyer representation agreement, and ... DENIED. She just doesn't want to sign. What should you do?

Remind the buyer of the benefits she's waiving.

Bonnie always schedules an in-person meeting with prospective buyers before she begins sending them data on properties. Why might this be?

She needs to define the buyer's needs and wants.

What's the purpose of sharing the history of buyer agency with the buyer?

Show how agency has evolved to benefit buyers.

What's an advantage an in-person meeting has over another way of communicating with a potential buyer client?

Since they've had face time with the licensee, buyers are more likely to stay with that broker.

Methods of qualifying a buyer vary, depending on how the buyer found you. What are some ways you could meet potential buyers?

The buyer saw your sign. The buyer called your office. The buyer stopped into your office. The buyer was referred by someone. The buyer found you on the Internet.

Which of the following best describes a net listing?

The seller specifies a desired price for the property and agrees to pay the broker any amount received that's more than that price.

Why might you want to share the progression of buyer agency over time with a buyer?

To show how it has evolved to benefit buyers

What's the purpose of sharing the history of buyer representation with buyers?

To show the progression toward buyer representation over time

Once all parties to a listing agreement have signed the agreement, it becomes a legal contract.

True

To protect your commission, a listing agreement should be in writing.

True

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker, without cause. Burt may legally do this as long as he's ______.

Willing to pay Scott's commission anyway Continue to Unit 2: Buyer Representation Agreements Return to Unit 1: Listing Agreements View Exam Results

Net listing

an agreement in which the seller specifies a price desired for the property and agrees to pay the broker any amount received above that price as commission

The buyer's duties

authorizing the agent to take on certain tasks notifying the agent of material changes

You sign an agreement with your new buyer client, Claudia. Under the terms of this agreement, you're given the sole right to represent Claudia, and no other licensees may represent her. What type of agreement is this?

exclusive right-to-represent agreement

The buyer representation agreement

helps to formalize the terms of the agreement between buyers and their agent (on behalf of the agent's firm).

exclusive right-to-represent agreement

most popular form of a buyer representation agreement because it gives the licensee the sole right to represent the buyer

Buyer representation agreement

outlines the terms of the buyer/agent relationship

the agent's duties include showing properties, assisting in negotiations, and providing guidance.

showing properties, assisting in negotiations, and providing guidance.