Ch 5, Unit 3

Ownership, title, and authority (listing agreement clause)

Warrants that the owners are the only title-holders of the property and therefore have authorization to sell it.

Signature section (listing agreement clause)

All the sellers sign and date the agreement and provide their address and other available information. The licensee fills in the firm's name, signs the document, and then provides other information about the firm.

Deposit (listing agreement clause)

Authorizes the listing agent to accept and hold any deposits on the seller's behalf which will be applied to the purchase price.

Lockbox (listing agreement clause)

Discusses lockbox use and states that persons using the lockbox are not insured against theft, damage, vandalism, etc. that could be attributed to lockbox use. The seller may indicate that he or she does not want a lockbox used.

Agency relationships (listing agreement clause)

Explains that the broker represents the seller. The broker will not represent the buyer; however, if the listing agent finds a buyer, it may be necessary for the broker to act in the capacity of a dual agent. This section also informs the seller that the broker represents other sellers.

Safety clause (listing agreement clause)

Here the broker and sellers agree to a specific number of days after the listing expiration during which the broker may still receive a commission. Also called a carryover clause, this clause is enforceable if the owner, or his or her new agent, sells the property to a buyer whose name appears on a list of persons to whom the original broker showed the property during the listing period. The broker must give this list to the owner within a specified number of days after the listing expiration.

Property (listing agreement clause)

Lists the physical address of the property, including city and county. In some situations, the licensee may need to attach a signed copy of a legal description.

Additional terms (listing agreement clause)

Provides space for any agreement or terms not covered by any other section, such as a seller paying for a termite report.

Listing term (listing agreement clause)

Shows the beginning and ending dates of the listing period.

Parties (listing agreement clause)

Shows the name of the owners and the name of the real estate office that is obtaining the listing.

Buyer's agency agreements

Similar to listing agreements, there are three common types of buyer agency agreements: -Exclusive buyer agency agreement - This agreement is also known as the exclusive right to represent. With the signing of this agreement, the buyer is legally bound to compensate the agent when the buyer purchases any property of the same type as described in the contract. The managing broker is entitled to payment regardless of who locates the property. This means that even if the buyer finds the property himself or herself, the buyer must still pay the agent the agreed upon commission. -Exclusive-agency buyer agency agreement - This exclusive contract is between the agent and the buyer. However, with this type of agreement the agent is entitled to payment only if he or she actually finds the property that the buyer purchases. If the buyer finds a property himself or herself, the buyer does not owe the agent a commission. -Open buyer agency agreement - This is a nonexclusive agency contract between a buyer and a broker. A buyer can enter into similar agreements with an unlimited number of other brokers. Only the broker who actually locates the property that the buyer eventually purchases is entitled to the commission.

Attorney fees (listing agreement clause)

States that the loser of a suit or arbitration of any disagreement must pay the associated costs.

Equal housing opportunity (listing agreement clause)

States that the property is offered in compliance with all anti-discrimination laws.

Sign (listing agreement clause)

The seller may indicate that he or she does not want a sign on the property.

Multiple listing service

A multiple listing service (MLS) is an organization of member brokers who agree to cooperate in the sale of properties listed by other brokers in exchange for a share of the broker's resulting commission. Once the listing agreement is signed, the licensee will discuss other forms that will need to be filled out in order to place the listing into a multiple listing service. The listing agreement itself will NOT be submitted to the MLS. However, the MLS does need information about the property that it can distribute to all the MLS members through the MLS publications. Some states have specific forms that they require their licensees to use; other states leave that to the local brokers or Board of REALTORS® to work out. You need to ask your broker how you will be handling the collection of information for the MLS. Depending on the form used in your area, you may collect any or all of the following information for submission to your local MLS. -County in which the property is located -Tax ID of the property -Listing office ID, name and phone number -Listing agent's ID, name and phone number -Co-listing office ID and the co-agent ID -Area, community or district -Street number and street name -City and zip code

Net listing

A net listing is not technically a type of listing agreement. In a net listing, an owner sets a minimum amount that he wants to receive from the sale of the property and lets the broker have as commission any amount above the set minimum. For example, Seller John tells Broker Bill that he wants $100,000 from the sale of his home. Broker Bill sells the home for $125,000, so Bill gets a $25,000 commission. While in this type of situation the seller is getting what he or she wants for the sale, it creates a conflict of interest for the broker. It essentially violates the broker's fiduciary responsibility of putting the client's interests above his or her own. If a licensee finds him/ herself in this situation, the licensee must refuse the seller's offer and encourage the seller to pay a flat fee or a percentage of the sale price. Otherwise the licensee must refuse the listing. Net listings are generally viewed as unprofessional, and they are illegal in many states. Net listings are illegal because they give unscrupulous brokers an opportunity to take advantage of a seller who may not know what his or her property is truly worth.

Exclusive agency

An exclusive agency listing agreement gives a broker the right to market and sell a property for a specified time period, while the owner retains the right to find a buyer and sell the property without owing the broker a commission. The seller must pay a commission only if the home is sold by the broker or an authorized agent or subagent of the broker. This type of agreement is exclusive in the sense that the property is listed with only one broker. And as we mentioned on the previous screen, all exclusive listings must stipulate a definite termination date. They cannot be "automatically" extended. For example, Broker Bill lists Jim's property. If Broker Bill (or anyone other than Jim) sells the property, he gets the commission. But if Owner Jim sells his own property, Bill gets no commission. This type of listing is not very common these days in residential transactions because it increases the chances of a dispute over the commission between the broker and the seller over who was actually the procuring cause of the sale.

Open listing

An open listing is a non-exclusive contract, authorizing a broker to serve as the agent for either the sale or the purchase of property. With this type of listing, a broker is not under the same obligation to perform as with other listing agreements, so an open listing is often considered to be a unilateral contract. This type of listing gives the seller or buyer the right to engage any number of brokers as agents. With an open listing, all contracted brokers can market the property or search for property at the same time. But only the one broker who brings the ready, willing and able buyer to the seller or who finds the right property for a buyer will receive the commission. In light of this, brokers may not put much effort into marketing the property. In addition, with an open listing, a seller could sell the property himself or herself and a buyer could make a purchase himself or herself without having to pay any commission to any broker. Another potentially negative situation arises when licensees from two competing brokers negotiate with the eventual purchaser of the property, leading the way for a dispute over which licensee was actually the procuring cause. Open listings are rare, since they offer the least assurance that the broker will receive compensation for his or her efforts.

Listing ownership

As we have mentioned before, the listing agreement belongs to the broker, even when it is brought in, prepared and signed by an affiliated licensee. So what circumstances can affect a listing agreement? All of these situations have some effect on a listing agreement. -Death of the broker -Brokerage firm goes out of business -Broker loses his or her license -Listing agent transfers to a different real estate firm If the broker dies, loses his or her license, or the firm goes out of business, the state's real estate licensing agency may choose to appoint a temporary broker to close any transactions that are pending. If not, all the broker's listings will terminate. If the listing agent transfers to another firm, the listing agreement will stay with the original broker, unless that broker gives permission for the licensee to take the listing with him or her and the seller agrees.

Commission and incomplete transaction

As we mentioned earlier, the listing agreement has a section that talks about the compensation the broker will receive for procuring a ready, willing, and able buyer for the property. However, if for some reason the transaction does not complete, the seller may still be responsible for paying a commission to the listing broker. This can happen if he or she: -Changes his or her mind and refuses to sell -Has a spouse who won't sign the deed -Has a title with uncorrected defects -Commits fraud with regard to the transaction -Cannot deliver possession -Insists on terms that were not in the listing agreement -Mutually agrees with the buyer to cancel the sale What this means is that the broker is still entitled to receive the commission if the transaction does not complete due to the seller's default. In the same vein, if a buyer hires a broker to find a property and agrees to pay a commission to the broker, the broker will be entitled to receive that commission if he or she performs according to the terms of the contract, even if the buyer: -Decides against making the purchase -Makes a direct purchase of a "for sale by owner" property -Chooses to purchase a property through another broker Note: Only a broker can initiate an action or file a suit against a seller or a buyer (with whom he or she had a valid written agency agreement) to receive payment of a commission. An agent cannot initiate such an action against a client. However, if the agent does not receive his or her share of an earned commission, that agent can sue the broker to get it.

Compensation vs. listing agreement

As we will see shortly, all listing agreements have a compensation clause that addresses the fact that the broker will receive compensation for selling the property. The compensation clause also gives specifics as to how the compensation will be paid - percentage or flat-fee. However, compensation agreements exist that are different from listing agreements. Two examples of compensation agreements that are not listing agreements are: -An agreement that the designated broker has with his or her employees or independent contractors that addresses how they will be paid. (We'll talk more about this in an upcoming unit.) -An agreement that a broker signs with an unrepresented seller - usually in the case of a For Sale by Owner (FSBO) property. In such an agreement, the seller warrants that he or she is offering the property for sale without the assistance of any real estate broker. The broker names a specific buyer who may be interested in the property. The seller agrees that if he or she enters into a purchase contract with the named buyer within a specified time period, the seller will pay a specified commission - either flat fee or percentage - to the broker's firm at closing.

Listing amendment form

As with most other forms you will use in your real estate career, this form also varies from state to state and even from Board to Board. In general, however, most listing amendment forms have spaces at the top to fill in: -Property address -Seller's name -MLS listing number -Listing office -Listed price Below that information, there is typically space to fill in the date of the original listing agreement, the name of the seller, and the name of the broker. The two most common changes are price changes and listing period extensions, so there are often check boxes to indicate if the change relates to either of these with a place to write in either the new listing price or the new expiration date for the listing. Below that the form usually has a section of blank space for the agent to write in a description of the change if it doesn't relate to price or listing expiration date. It is often noted on the form that all other terms and conditions of the original listing agreement remain unchanged. Then there are places for the document to be dated, signed by the agent on behalf of the indicated broker or broker's company, and signed by the seller or sellers.

Acknowledgements

At the bottom of the form is a place for the sellers' signatures verifying that the information on the form is accurate "to the best of their knowledge." There are also spaces on the form for the buyers to sign. Often their signatures mean that the buyers are recognizing the following: -They have a duty to pay attention to any material defects and discover any problems with the property for themselves. -The disclosures in the statement are made solely by the seller and not by any real estate licensees. -Licensees are not responsible for any inaccuracies made by the seller, unless they knew the information was inaccurate. -Disclosure information is not intended to be part of any written purchase agreement between buyer and seller. -They have received copies of the Disclosure Statement signed by the seller. -If the home was built prior to 1978, they have received the appropriate lead-based paint information. In some cases, the disclosure form also contains two waiver provisions: -Waiver of Right to Revoke Offer - If the buyers sign this waiver, they are saying they have read the disclosure statement, approve it, and are giving up their right to revoke the purchase offer. -Waiver of Right to Receive Completed Property Disclosure Statement - If the buyers sign here, they are giving up their right to receive the seller disclosures

Broker's and seller's duties (listing agreement clause)

Broker agrees to use due diligence to achieve the purpose of the listing agreement. The seller agrees to consider all good faith offers on the property, to make the property available for showings, to take responsibility for all information the seller provides to the broker and to hold the broker harmless for any claims resulting from the information given to or withheld from the broker.

Commission after listing expiration

Even after a listing expires, a broker may still be entitled to receive a commission. If you recall, most listing agreements have a clause in place (often called a carryover or safety clause) which says that the broker is still entitled to a commission for a set period of time after the listing expires, if the property is sold to a prospect that the broker introduced to the property during the time of the listing. Consider this situation. Broker John showed Seller Jim's home to Buyer Pam during the listing period. After the listing expired and within the safety period written into the listing agreement, Jim sold his home to Pam. Jim still owes a commission to Broker John. In most states, if a listing expires or the seller cancels the agreement and lists with a new broker, the protection period we discussed above is no longer valid. However, if the seller canceled the listing agreement without cause, the seller may be liable for damages to the broker, regardless of whether the seller listed the property and paid a commission to another MLS member.

Avoiding agency conflicts

If a prospective buyer approaches a listing agent about a property he or she has listed, it's important for the agent to remember that he or she is the seller's agent. However, even though a licensee is the seller's agent, he or she must always deal with buyers in an honest manner and use reasonable care and skill in the transaction. He or she must also disclose all material facts. In carrying out these duties owed to buyers, a seller's agent must be careful not to give the impression that he or she is representing the buyer, especially by giving advice that might cause the buyer to assume the licensee is looking out for the buyer's interests. Giving such an impression would create a potential conflict of interest and could lead to a dual agency situation. If a buyer makes this mistaken assumption, he or she might inadvertently disclose information to the seller's agent that he or she expects the agent to keep confidential. But the seller agent's duty of confidentiality is extended to the seller, not the buyer. And furthermore, the agent's duty of loyalty to the seller would compel him or her to pass on to the seller any information given by the buyer. In a situation such as this, the seller's agent could: -Disclose the potential for dual agency and get written permission for all parties to act as a dual agent. -Refer the buyer to another agent. Before making any decisions, the agent should always ask the prospective buyer if he or she is represented by another agent.

Listing termination

In a previous unit, we discussed the ways to terminate an agency relationship. Since a listing agreement forms an agency relationship between the broker and the seller, it can terminate when one of the following occurs: -Performance - The licensee has helped the seller find a ready, willing, and able buyer to purchase his or her home. -Expiration of the agreement term - The date arrives that was stated in writing on the listing agreement. -Termination - The parties either mutually agree to end the relationship or one party decides to end it.

Agent's role

In most cases, it is an affiliated licensee who will be taking the listing and filling out the appropriate forms. Even though this is the common practice, we can't stress enough that the agreement is actually a contract between the firm of the broker and the seller. According to the license law of most states, listings, transactions, management agreements, and other contracts relating to providing brokerage services are property of the real estate firm. As we discussed in the unit on agency relationships, the broker's affiliated licensees are acting as a subagent to the seller and on behalf of the managing broker when performing their real estate activities. For example, Licensee Sally works for Broker Dan. Seller Tom decides he wants to list his property with Sally, so they arrange a meeting to fill out the paperwork. Sally and Tom sign the listing agreement. However, the listing agreement is actually a contract between Tom and Dan. Sally is acting on behalf of Broker Dan. Once the listing agreement has been completely filled out and signed, the seller must receive a copy of the document at the time the signatures are obtained (or as soon thereafter as reasonably possible). For this reason, many listing agreements are printed on multiple form stock so that the copy can be given to the seller immediately.

Seller representations (listing agreement clause)

Indicates that the seller is unaware of any legal, financial or physical reasons that would affect the seller's ability to sell the property. If the seller becomes aware of any such reasons, the seller must notify the broker immediately.

Listing price and terms (listing agreement clause)

Indicates the asking price for the property. May also indicate any financing terms, such as loan assumption, down payment amount, all cash, etc. Note: Unless the terms are specified, a seller is not required to pay a commission when refusing a full price offer unless the offer is all cash.

Listing signatures

It's very important that all the owners sign the listing agreement to avoid any potential problems. But what happens if the seller is unclear about the names of all the owners? In what types of situations could this happen? This depends on how the title is held. In cases where the title is held in severalty (one owner), as joint tenants with right of survivorship or as community property, ownership would seem pretty evident. But ownership might not be quite so clear if title is held: -As Tenants in Common - New owners could inherit a portion of the property from any of the original owners. -By a Partnership - Persons inheriting from current owners might not know the names of the other partners. If the sellers are unclear about the ownership of the property or if you just want to check for yourself, you can do it in one of these ways. Ask the seller for a copy of the deed or other title document. -Call and check with a title company in the area where the property is located. -Call or visit the county tax office and check the records.

Signed written document

Listing agreements must be in writing and signed by the seller to be enforceable. In other words, if the agreement is not in writing, the broker could not sue for the commission if the situation were to arise. Even though such a situation would be rare, if a seller wrote the following on a piece of paper and signed it, it would likely be an enforceable document. "I, Sally Mayer, will pay broker Sam Donald 7% of the selling price of my home, located at 727 Charisma Drive, My City, when he finds a ready, willing and able buyer for the property."

Items included and excluded (listing agreement clause)

Lists any personal property that may be included as part of the sale or any real or personal property that is being excluded from the sale. This will avoid any later misunderstandings.

Property disclosure statement

Most states (although not all) require sellers to provide some sort of Property Disclosure Statement to a buyer within some specified number of days (varies by state) of the acceptance of a purchase and sale agreement, but the seller is usually not required to provide the statement before that time. However, many listing agreements encourage the seller to give the completed form to his or her agent as soon as possible. When this law is in effect, it typically applies to: -Multi-family dwelling of up to four units -New construction -Certain condominiums and timeshares -Manufactured and mobile homes -For-sale-by-owner (FSBO) properties (sometimes)

Property disclosure exemptions

On the other hand, property disclosure requirements do not usually include the following transfers of property: -A foreclosure or deed-in-lieu of foreclosure -A gift or other transfer to a parent, spouse, domestic partner, or child of a transferor or child of any parent, spouse, or domestic partner of a transferor -A transfer between spouses or between domestic partners in connection with a marital dissolution or dissolution of a state-registered domestic partnership -A transfer where a buyer had an ownership interest in the property within two years of the date of the transfer including, but not limited to, an ownership interest as a partner in a partnership, a limited partner in a limited partnership, a shareholder in a corporation, a leasehold interest, or transfers to and from a facilitator pursuant to a tax deferred exchange -A transfer of an interest that is less than fee simple, except for the transfer of a vendee's interest under a real estate contract -A transfer made by the personal representative of the estate of the decedent or by a trustee in bankruptcy -A transfer in which the buyer has expressly waived the receipt of the property disclosure statement

Seller's disclosures

Other sections that may be found on a Property Disclosure Statement include the following: Water -The source of the household water -Any easements regarding the water source -Problems or repairs -If the source provides adequate potable water -Existing water treatments systems -Existing water rights related to the household supply -Irrigation water rights for the property, if applicable -Entity supplying irrigation water to the property -Condition of any outdoor sprinkler system Sewer/On Site Sewage System -Kind of sewage system on the property -Connection to public sewer main, if applicable -Sewage fees or charges -Construction and upkeep of on-site sewage system, if applicable -Connection of plumbing fixtures to sewage system -Changes or repairs -Location of on-site system -Frequency of maintenance of on-site system Structural -Roof issues -Basement problems -Conversions, additions or remodeling -Age of the home -Settling, slippage or sliding, if applicable -Defects with foundations, sidewalks, slab floors, driveways, etc. -Pest inspections -Pest infestations -Attic and basement insulation Systems and Fixtures -Electrical system -Plumbing system -Hot water tank -Garbage disposal -Appliances -Sump pump -Heating and cooling systems -Security system Homeowner's Association/Common Interests -Homeowner's Association, if applicable -Periodic assessments -Pending special assessments -Shared common areas or existing maintenance agreements for pools, tennis courts, walkways, etc. Environmental -Drainage problems -Fill material -Damage to the property caused by disasters, such as fire, wind, floods, earthquakes, etc. -Existing shorelines, wetlands and floodplains -Existing environmental hazards, such as asbestos, radon gas, fuel or chemical storage tanks, etc. -Commercial or industrial use -Soil or groundwater contamination -Transmission poles, transformers, or other utility equipment on the property -Dumping site -Illegal drug manufacturing -Radio tower interference Lead-Based Paint This section would apply only to homes built prior to 1978. The seller of such a home must disclose information about the possible presence of lead-based paint in the home. The seller also acknowledges whether he or she has provided all documents and reports pertaining to lead-based paint to the buyer or indicates that he or she has no such reports to provide.

Property disclosure statement contents

Real estate licensees are not responsible for filling out the disclosure form. That responsibility belongs to the seller. But it's important for the licensee to understand all the legal aspects of the disclosure form, so that he or she can help the seller by answering any questions the seller may have in filling out the form. Most forms allow the seller to give information about the condition of the property, the status of buildings and utilities, whether or not there are easements or encumbrances that affect the property and information about important environmental factors. The seller may be asked about these aspects of the property: -Seller's authority to sell the property -Issues with the title -Encroachments, boundary agreements or boundary disputes -Private access roads -Rights-of-way, easements or access limitations -Existing written agreements for maintenance of an easement or right-of-way -Studies, surveys or notices that would adversely affect the property -Pending or existing assessments -Zoning violations or unusual restrictions on the property that would affect future construction or remodeling -Boundary survey -Covenants, conditions or restrictions which affect the property Note: Any covenants or restrictions that would forbid or restrict the conveyance of the property to persons belonging to the protected classes defined under Fair Housing Law are void, unenforceable and illegal.

Compensation to broker (listing agreement clause)

Shows the mutually agreed upon commission the seller will pay the broker. It can be a percentage or a specific amount, although percentage is preferred because it will adjust according to the actual sales price. May provide for any additional compensation to the broker, such as advertising fees or MLS fees. May state that the broker has informed the seller of the firm's policy of dealing with cooperating brokers and how the commissions are divided. May indicate that the seller will have escrow pay the broker's commission directly from the sale proceeds.

Modifying a listing agreement

Since the listing agreement is a valid contract once all parties have signed it, it can only be modified with the written consent of all the parties. Consider this situation. Agent George signed a listing agreement with the Hatfields. After three weeks on the market with just a few showings, George and the Hatfields mutually agree to extend the period of the listing. Even though the decision is mutual, it's not legal unless it is changed in writing. So how does George do that? One way to make the change, and one that is very common, is to cross out the date, write in the new date and then have all parties initial the change. If the change is a simple one, it's okay to do it that way. But a cleaner, more efficient way to make a change to a listing agreement is to use a form especially designed for that purpose. Most states have such a form, so you'll need to check with your broker or local Board of REALTORS® to find out what form to use.

Changes to property condition

Sometimes, after the date that the seller completes the disclosure statement, he or she becomes aware of additional information, or some change takes place that makes something in the disclosure statement inaccurate. Consider this situation. Seller Jim delivers a disclosure statement to Buyer Matt. Matt reads it over and decides everything looks good enough to continue with the purchase. A few weeks later, a major hail storm damages the roof and now it leaks. So the original disclosure is no longer accurate. In some states, if something like this happens, the seller must amend the disclosure statement and deliver the amendment to the buyer. However, the seller will not have to do an amendment if he or she takes whatever corrective action is necessary to restore the accuracy of the disclosure statement prior to the closing date. If the seller takes no corrective action prior to the closing date, the buyer will have the right to exercise one of the following two options. -The buyer can approve and accept the amendment. -The buyer can rescind the purchase agreement within three business days after receiving the amended disclosure statement. Consider this situation. Continuing our example from above, Seller Jim must deliver an amended disclosure to buyer Matt. Once received, Matt has the option to accept the amendment, or he can rescind the purchase agreement within three days. Alternatively, Jim can have the roof repaired before closing and not have to provide an amended disclosure statement to Matt at all.

Successors and assigns (listing agreement clause)

States that the agreement is binding on the seller and the seller's successors and assigns.

Security and insurance (listing agreement clause)

States that the broker is not responsible for loss or damage to the property, even with a lockbox present. The seller must take steps to safeguard any valuables and obtain insurance to cover the risks.

Multiple listing service (listing agreement clause)

States that the broker will provide the transaction terms to the Multiple Listing Service, unless the seller signs a form to withhold the listing.

Entire contract (listing agreement clause)

States that this agreement supersedes all previous discussions, negotiations and agreements between the seller and the broker. Therefore, anything that is not written into this agreement is not part of the agreement.

Identification of the property

The best way to identify a property is through the legal description. A street address can be and is often used, but it should be supported by the legal description, attached to the listing document. If the licensee does not have a copy of the description at the time the listing is prepared, he or she can have the seller sign it with a note on the legal description line that states the description will be provided by the agent at a later time. The agent can obtain the legal description from a title insurance company or from the seller's deed

After the disclosure is delivered

The buyer has no right of rescission if the seller takes whatever corrective action is necessary to restore the accuracy of the disclosure prior to the closing date. If any act, occurrence, or agreement comes up or becomes known after the property closes which causes the disclosure statement to be inaccurate in any way, the seller has no obligation to amend the disclosure statement, and the buyer no longer has the right to rescind the transaction. If the seller of a residential property fails or refuses to provide a disclosure statement to the prospective buyer, the prospective buyer's right of rescission will apply (unless the buyer has waived the right of rescission) until the earlier of these dates: -Three business days after receipt of the disclosure statement. -The date the transaction closed For purposes of exercising this right, closing is said to have occurred when the buyer has paid the purchase price and the property has been conveyed through the delivery and recording of the deed or other applicable document. Once the property has closed, the seller has no obligation to deliver any disclosure statement, and the buyer does not have the right to rescind, even if new information comes to light.

Listing agreement

The listing agreement is a legally-binding contract that creates an agency relationship authorizing a broker to serve as the agent for a principal in a real estate transaction. Most listing agreements are bilateral employment contracts - meaning that the owner hires the broker and promises to pay a commission in exchange for the broker's promise to locate a "ready, willing and able" buyer or tenant for the owner. Listing agreements must be in writing to be enforceable. Oral listings do not afford a broker any legal protection. If the listing agreement is not in writing, a broker could not collect his or her commission if the seller refused to pay. The three most common types of listings are: -Open Listing -Exclusive Right to Sell Listing -Exclusive Agency Listing Another "listing agreement" we will cover is the Net Listing.

Promise of compensation

The listing agreement must contain an assurance that the broker will receive compensation and state how that will happen. The seller could stipulate that the broker will receive compensation when the buyer is found, when a contract is signed or only if the sale actually closes.

Specifics of compensation

The listing agreement must show the broker's compensation as a fixed amount. It is usually indicated as a percentage of the sale price, but it could be a specific flat fee. As we mentioned when we talked about net listings, the compensation may NOT be indicated as whatever is left over from some net price the seller has in mind to receive.

Exclusive right to sell

The most widely used agreement is the exclusive right to sell listing agreement. Under this arrangement, the broker has the exclusive right to market the property for a specified period of time. If the property sells while the broker has the listing, the seller must pay the agreed-upon commission, regardless of who actually procured the buyer (who was the procuring cause). This means that even if the seller himself finds the buyer with no help from the broker, the seller still owes the broker the commission. When a broker enters into this type of listing, he or she becomes more willing to expend the time, energy and funds to actively market the property. It limits any conflict with the seller over who was the procuring cause. An exclusive right to sell listing gives the broker the greatest assurance that he or she will receive compensation for his or her marketing efforts. And as a result, sellers usually see a quicker and more profitable sale of the property. Note: All exclusive listing contracts must contain a definite termination date. A licensee could be subject to disciplinary action for receiving a commission for a transaction if the agreement did not have a definite end date.

MLS listing information

You will probably collect the following information: -Listing price -Whether or not the property will be advertised on the Internet -Whether the address should be shown to the public -Selling office commission and comments regarding such -Number of bedrooms -Total number of bathrooms -Lot size, with an indicator of whether the number is square feet or acres -Year built -Listing date -Expiration date -School district code with spaces to write in the names of the schools -Occupant type: owner-occupied, presale, tenant or vacant -Owner's name, phone number, city and state -Occupant's name -Phone number to call for showing -Descriptions of lands and improvements -Driving directions to the property You may also collect information regarding a property's location, including the lot number, block number, and plat/subdivision/building name. Also information regarding: -Possession -Showing parameters, such as when the property can be shown and under what conditions -Whether or not a Seller's Property Disclosure has been provided -Tax year and tax amount -Homeowner dues or rental amounts, if applicable -Potential financing terms Site information, such as: -Lot dimensions -Waterfront footage -Zoning code and jurisdiction -Topography, such as level or pasture -View, such as golf course or mountain -Lot details, such as cul-de-sac, paved street, corner lot -Waterfront features - ocean, lake, high bank, etc. -Site features - indoor/outdoor arena, fenced, outbuildings, etc. -Pool - if so, what kind Building information, such as: -Sewer or septic -Type of basement -Type of parking available -Builder name -Style of construction -Specific information about the home if it is a manufactured home -Environmental certifications -Foundation type -Building condition -Roof type -Exterior finish -Architecture -Interior features, such as: -Finished versus unfinished square footage -Energy sources -Heating and cooling type -Floor coverings -Fireplace, ceiling fans, walk-in closets, sauna, etc. -Appliances that stay -Total number full, three-quarter, and half bathrooms -Where each of the rooms is located relative to the main floor Utility/Community information, such as: -Community features -Source of the drinking water supply -Spaces to write in the names of the utility companies and nearby bus line