Real Estate Course Level 10

Facts of a feather Game b) net listing

. illegal. . listing agent is paid any excess amount in the final sales total from a set amount. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Facts of a feather Game d) exclusive agency listing

. listing agent or owner may earn compensation on sale. . an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Quiz Level 10 a) four times more. Per some industry experts, a license holder can service up to four times as many listings as active buyer clients.

According to some industry experts, how many more seller clients could a license holder service for each buyer client they take on? a) four times more. b) There is no difference. c) three times more. d) two times more.

Brokerage Engagements: The Breakdown

Brokerage Engagement: The Breakdown: You've got questions, and I, fortunately, have got some answers, Yoni. . Who's involved in a brokerage engagement? Brokerage engagements are written agreements between an agent and a client(s). . What's the purpose? The purpose of a written brokerage engagement is for a professional to assist a client in the completion of a task, such as selling their home. The agent serves the client and represents their interests as they seek to complete this task. . What are the legal requirements of a written brokerage engagement? A brokerage engagement must be in writing, have the signatures of all parties, and have an expiration date. We'll delve more into this later.

Referrals Paragraph

During the process of a real estate transaction, the seller may need to use the services of third parties to complete the deal (e.g., a landscaper). This paragraph acknowledges the listing agent may receive compensation from these third parties for referrals.

Exclusive Agency Listings

Exclusive agency listings combine elements of open listing agreements and exclusive right-to-sell agreements. Just One Broker, but the Owner Has Options: . As with open listings, exclusive agency listings release the owner from any obligation to pay a commission in the event that the owner secures the sale of the property. . As with exclusive right-to-sell listings, in exclusive agency listings, the seller agrees to list the property with only one broker during a specified listing term. Who Gets the Commission?: The listing broker is owed commission unless the owner sells the property. But the distinguishing characteristic of exclusive agency listings is that the named listing broker is owed commission if the property is sold by anyone other than the owner. This feature can lead to problems on occasion. Let's look at some of those problems!

The Fair Housing Paragraph

Fair housing laws apply whether or not there is a fair housing paragraph specifically mentioned in a listing agreement, but Georgia requires that all license holders have a fair housing paragraph in the listing agreement. By requiring this paragraph, the state of Georgia is underscoring the importance of following fair housing laws. Agent Pro Tip: Use this paragraph as an opportunity to educate your seller clients about its importance.

Seller Default Paragraph

Listing agents are working the transaction for the goal of compensation at the end. If the transaction does not happen due to the seller, the seller is responsible for compensating the listing agent for the fees mentioned in this paragraph. Fees Outlined: What kind of fees are we talking about? Great question, Yoni. Here are some potential bucks that a seller could be liable for: . Out-of-pocket costs occurred by a listing broker in their efforts to market a property. . Printing and copying costs (Kinkos ain't cheap). . Mileage rate (Gas ain't cheap either). . Costs to remove a listing from multiple listing service.

Quiz Level 10 b) listing price. The price that a house is listed at is its listing price.

Michael is looking at houses on the MLS. On the website, he sees a house that is asking for $200,000. What is a term used to describe $200,000? a) dream price. b) listing price. c) sales price. d) market value.

Special Circumstances Paragraph: Listing of Property

No property is the same, Yoni. This paragraph asks the seller to call out any special circumstances (bankruptcy, divorce) so that all parties are aware of the contingencies. Agent Pro Tip: Discussing divorce or bankruptcy with a client could be a very touchy subject for someone. Give your client emotional space to answer by giving them access to some of the questions in advance before you sit down with them.

Listing Agreements: A Closer Look

Now that you have a very basic education on listing agreements, we'll build on that foundation by discussing the three legal forms of listing agreements in more detail. We'll cover: . What goes into a listing. . The causes for listing termination. Free-Form Forms: Unlike many states, there are actually very few prescribed (promulgated) forms or contracts mandated by the Georgia Real Estate Commission. That holds true for agency agreements in Georgia — both listing and buyer-broker agreements. That being the case, a broker can use their own form (constructed or approved by an attorney) or one furnished by a local board of REALTORS® or another industry trade organization.

Answer 1) One relationship (listing agent) is centered on someone providing a specified service to another party. Once the action is completed, the relationship is no longer needed. However, the copywriter relationship is an employer/employee relationship and is ongoing and does not have a stated expiration date.

Question 1) Janelle is looking for a listing agent to sell her home. She's also looking to add a copywriter to her marketing agency. What are some unique differences between these employment relationships?

Quiz Level 10 c) in writing. The best way to create any agency relationship is to do so in writing so there is a record that documents the time and scope of the agreement.

The best way to create any agency relationship is to do so: a) verbally. b) in person. c) in writing. d) through assumptions.

Seller's Property Disclosure Paragraph

The state of Georgia requires sellers to complete a property disclosure form. This paragraph identifies that as a responsibility of the seller. Three Days: The seller is responsible for filling out this form within three days of signing this agreement. Bonus Disclosure Round!: If the property in question was built previous to 1978, then the seller needs to also fill out a Lead-Based Paint Disclosure form. Bonus form! An Agent of the Paper: These forms (Seller's Property Disclosure form, Lead-Based Paint Disclosure form) are not to be kept under file and key. No, the listing agent will be distributing these files to prospective buyers interested in the property.

Notices Paragraph

The two subparagraphs here lay out the expectations for communication between the two parties during the relationship. Maintain Good Communication: During a transaction, it's incredibly important for both parties to be responsive while communicating. This paragraph sets the expectation for the seller client's communication. Lay Out Communication Expectations: How will the agent communicate with the seller? This identifies the communication methods to be used.

Facts of a feather Game b) net listing

illegal a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Performance

Agency can be terminated in a number of ways, but, clearly, the most desirable way to terminate an agency relationship is through the fulfillment of its purposes — such as the home getting sold or bought. The term you'll often hear to describe this is performance. Performance Definition: Performance is the fulfillment of an obligation, duty, or contract. Happy Memories: With the performance of the agreement, both parties - client and agent - go their separate ways with happy memories of the agency relationship. In the best-case scenarios, the agency relationship works out so well that future reunions of the parties are possible should additional agency relationship needs arise (such as the purchase of a bigger house for a growing family).

Legal Description Paragraph: What EXACTLY Is for Sale?

As you learned earlier in the course, a deed is only valid if it includes a legal description of the property being conveyed. Having space in a listing agreement for the seller to provide a legal description ensures that you: . Market the right property. . Ensure the deed has a legal description when it's conveyed. Legal Description Definition: A description of a property that is distinct and precise enough to distinguish it from all other properties. Four Options: As you can see, the legal description paragraph gives the seller four different ways to give a legal description. Sellers can do either of the following. . Attach an exhibit: In this instance, an exhibit, as an attachment to the listing agreement, can be used if the legal description requires more than the blanks in this paragraph allow for. . Use the county's land records: Describe the property by either its: . Deed book and page number. . Lot and block numbers. . Provide condominium unit information: (This option is obviously only for condominiums, Yoni.) Agent Pro Tip 1: This legal description information will be used later in the sales contract, so accuracy now will save you time later. Agent Pro Tip 2: Legal description information is the stuff that your sellers will probably not know without some preparation. You can make their lives easier (and impress them) by giving them helpful tips on how to look up their legal descriptions before listing agreement signing.

General Listing Agreement Advice & Sample

Before we dive into the key paragraphs of a listing agreement, here is some general advice for listing agents on listing agreements. There's No Standard Form: Listing agreements are not promulgated — in other words, there isn't one listing agreement for the entire state of Georgia. Instead of there being one listing agreement to "rule them all," individuals and entities create their own listing agreements. Amidst this ocean of creativity, it's important to remember that agreements are still actual legal documents — it's important for listing agreements to be legally sound to protect you and your clients! So, it's always good to use a listing agreement that has been approved by a lawyer who is licensed by the state of Georgia. Pro Tip: As a newly licensed salesperson, lean on your sponsoring broker to provide legally sound listing agreements. Does your brokerage provide agency agreements? How were they created? Get the Info: To fill out a listing agreement, the seller will need to have some detailed information about the property. This information will allow the broker to provide correct information to potential buyers, as well as to other brokers through the MLS (if applicable). Obtaining this information upfront will also help prepare the sales agent to answer most of the typical questions buyers will ask without having to contact the seller with questions every time. By familiarizing themselves with the property they are selling, the real estate professional will be able to gain the confidence of both the seller and buyer. Pro Tip: When possible, let your sellers know what information you'll need from them while filling out the listing agreement. Sample Listing Agreement: Here's a sample agreement form. Your broker might use something similar or not, but this is the one we'll be using for the purposes of the walkthrough we're about to embark on. It might be a good idea to open this document or print it for easy reference as we go through this.

Compensation Paragraph: Cooperating Brokers

Buyer's agents want to get paid too. This paragraph sets how much cooperating brokers may get paid in a sale. Note the contrast in language from the previous paragraph: "Broker agrees to pay the cooperating broker, if any." The seller agrees to pay __ amount in compensation for the sale. However, the listing broker is responsible for compensating any cooperating brokers. Buyer Responsible for What's Left: Though rare, it is possible that a listing agreement either does not allocate compensation for a buyer's agent (leaving this area blank) or does not allocate the same amount of compensation for the buyer's agent to which the buyer's agent agreed. In those situations, the buyer would be responsible for compensating their agent for any remaining amount that they agreed to in their buyer rep agreement. This amount of compensation for the buyer's agent would be added on top of the final sales price cost to the buyer. Recap: This compensation paragraph for cooperating brokers allocates whether and how much the listing broker will pay cooperating brokers for their work in the sale of the property. EXAMPLE: Let's revisit the example from the previous screen. Susan agreed to a 6% commission rate with Casey, her listing agent. The listing agreement also said that half of that commission would go to any cooperating brokers. A fellow named Sam bought Susan's home for $100,000. Sam was represented by Billy, his buyer's agent. Sam and Billy agreed to a 3% commission rate in their buyer rep agreement. When the 6% commission on the sale went to the listing broker ($6,000), half of that ($3,000) was then paid to the buyer's agent as the cooperating broker, in accordance with the MLS agreement. Because the buyer's agent received a commission equal to 3% of the sale, Sam did not have to pay Billy anything out of his own pocket.

Brokerage Engagements: The Must-Haves and Can't-Haves

Let's break down the requirements of a brokerage engagement. The Must-Haves: A brokerage engagement MUST: . Have an expiration date. If the expiration date passes before the service is completed (e.g., selling a home), a new agreement must be created and signed by both parties in order to continue the agreement. . Be filled out before the client signs. Clients have to know what they are signing! . Have signatures from the client and licensee. It takes two parties to form a relationship. . Have a true copy given to the client. Something for the client to put on the fridge (and reference later). The Can't-Haves: A brokerage engagement CANNOT: . Have a renewal date. Brokerage engagements die, either after the service is completed or after the expiration date on the contract. It is illegal to have a renewal date on a brokerage engagement in Georgia. . Require the client to notify the licensee in order to cancel the agreement post-expiration date. You cannot do anything that prevents a client from ending an agency relationship after the expiration date.

Independent Contractor Relationship Paragraph

Let's consider the relationships that are in play during a listing agreement. 1. Listing broker ↔ seller And if the listing broker has salespersons at their brokerage: 2. Listing broker ↔ affiliated salespersons Defining the Relationship: This paragraph points out this relationship between the listing broker and their affiliated licensees. What's the difference between an employer/employee relationship and an employer/independent contractor relationship? Great question, Yoni. . employer ↔ employee: Employer has more control (e.g., can set working hours) AND more responsibilities (e.g., pays for employee health care). . employer ↔ independent contractor: Independent contractor has more control (e.g., they determine their own working hours) AND more responsibilities (e.g., pay for their own health care). Favorite Relationships of All Time What's your favorite relationship of all time, Yoni? I personally am holding out hope that Milo and Otis never let me down. It's a dog-eat-dog world out there in the world of celebrity relationships.

A Lawful, Bona Fide, Written Offer: A Recap

That last section went over quite a lot. Let's recap! According to this listing agreement, a seller may owe their listing agent compensation even if a sale does not go through. This may happen if the seller turns down "a lawful, bona fide, written offer." The listing agreement defines a lawful, bona fide, written offer as an offer that: . Meets at least the amount of the listing price and is in cash (not dependent on a loan). . Does not introduce any new contingencies, such as a longer option period. . Does not make any property requests beyond those already agreed to by the seller in the property disclosure statement. . Sets the closing within 30-45 days of the offer.

Marketing Paragraph: Marketing Permissions

The Internet is a pretty big space, Yoni. In this paragraph, the seller authorizes the listing agent to market their property on the Internet (not just the MLS). It also relieves the listing agent of many potential liabilities. Acknowledgment of How the Internet Works: If the listing agent markets the property online, then third parties (people who are not the seller or the listing agent) will have access to the property's information, including photos. Recap: The Internet is a wild place, and the listing agent cannot control what happens to listing photos posted there.

Protection Period Paragraph: Protecting Your Commission

Let's take a quick break from all the contracts to introduce this chapter's key term: protection period. Limited Time Frame: A protection period is a limited time frame after an agency agreement ends where an agent can be owed compensation if certain situations occur. If This Occurs, the Agent Is Protected For example, an agent might be owed commission during the protection period if: . A prospective buyer who previously attended an open house during the listing period returns during the protection period to purchase the home. . A buyer returns to a previously visited property post buyer rep agreement to purchase the property. Protection periods are a standard feature of most agency agreements. They protect license holders from situations where clients wait to complete the transaction until after the agreement ends in order to save money on the compensation while using the agent's marketing efforts to procure the buyer.

Listing Agreements: For the Sellers (and Listing Agents)

Listing Agreement: Written agency between a broker and a seller will usually take the form of a listing agreement, in which a principal authorizes the broker and any affiliated salespersons to assist the principal in the sale of real property. From Caterpillar to Butterfly: Signing this agreement creates two new agency roles. Signing the agreement transforms: . The selling customer into a client of the broker . The broker into a seller's agent Information Within: This agreement will contain information regarding: . The start and expiration dates of the representation. . The duties of each party. . The expectations for compensation. Not Provided by Georgia: As with the buyer representation agreement, a listing agreement is NOT available through the Georgia Real Estate Board. Consequently, in order to achieve written agency via a listing agreement with the seller, a broker has the option of using a listing agreement from a state or local association of REALTORS®, or creating one with the help of an attorney.

Property ID Paragraph: What's for Sale?

Listing agreements exist to help sellers sell something — their property! So, every good listing agreement will need to have a paragraph that properly identifies what is actually being listed for sale. The Address: First, the listing agreement will call for a detail that is probably known by all sellers and Jeff Bezos: the property's address. Agent Pro Tip: If your seller isn't sure what their Tax Parcel ID number is, they can look this up on their county clerk website. (And if the county clerk does not have a website, they may also contact their county clerk for information and to let them know about this thing called the Internet.)

Agency Agreements to Brokerage Engagements: A Journey

On the screens ahead, we'll be discussing brokerage engagements, which might lead you to wonder: "Whatever happened to agency agreements?" Also Known As Brokerage Engagements: Agency agreements are simply agreements between agents and their clients. And the state of Georgia has defined the written form of agency agreements between clients and agents as a brokerage engagement. #TheMoreYouKnow Brokerage Engagement: A Definition: A brokerage engagement is a written agreement between two parties where one party agrees to provide a specified service to the other. Brokerage engagements are bound by both contract and agency law. Recap: A brokerage engagement is basically a written agency agreement.

The Takeaway

There are several types of listing agreements, so it's important for you to understand their differences. That way, you can properly guide your seller clients and help them select the one that best fits their interests and needs. In Chapter 2, you learned: ✅ What a listing agreement is. ✅ The four types of listing agreements. ✅ The differences between an open listing, exclusive agency listing, and exclusive right-to-sell listing. Yoni, you now have the right-to-advance to Chapter 3, where we'll learn all about key clauses commonly seen in listing agreements.

Agency and Brokerage Paragraph: Dual Agency Disclosure

Unless a broker indicates otherwise, they offer all allowable types of agency in the state. Because dual and designated agency have special disclosure requirements, you'll see subparagraphs on those, which we'll cover here, starting first with dual agency. Dual Agency: It's important for the seller to be aware of the prospects of dual agency and understand how it could affect their current agency relationship. If their brokerage represents also buyers, it is possible that the listing broker may represent a potential buyer who shows interest in the property. And in that case, the listing broker will owe both fiduciary duties to the prospective buyer and the seller. Let's break down what that means through the remaining dual agency paragraphs. Conflicting Interests: A seller and a prospective buyer may have conflicting interests. For example, a seller most likely wants to sell their property for the maximum profit while a buyer most likely wants to buy it for the least amount of money. Disclosure Rules: Just as with other real estate transactions, a listing broker operating under dual agency will need to comply with dual disclosure rules. Dual Agency Consent: Life is about choices, and the seller has the option to not consent to dual agency. If an agency situation changes to dual agency, the listing agent would be wise to get written confirmation from the seller that they understand how the agency relationship is changing. Confidentiality: A seller can still expect their listing agent to comply with the fiduciary duty of confidentiality in a listing agency relationship. As long as the information is not a material fact to the buyer, the listing agent should not disclose any information to the buyer that may harm the seller's ability to negotiate. Timely Disclosure: The listing agent is responsible for providing timely disclosure to the seller of new parties that enter the transaction with whom they may have a relationship. Recap: Get Written Confirmation Always inform your sellers of any changes in the agency relationship and always get written confirmation from your seller.

Protection Period Paragraph: Protecting Your Commission

We just defined what a protection period is, now, let's see it in action with these protection period paragraphs. Name the Days: In 9A, the listing agent and seller agree to the specified number of days that the protection period will last after the listing agreement period. Which Buyers?: In 9B, we're told what kinds of buyers are included in this protection period. This paragraph defines the buyers as anyone the broker helped during the listing agreement period, including buyers who made visits or offers. Note: It's much easier to prove in court that you previously procured a buyer during the listing period by having written proof, so it would be very smart to document interactions with prospective buyers. . Example: Keep attendance sheets at an open house so you get a record of every buyer who attends, AND you can also follow up afterward to try and get that sale!

Quiz Level 10 b) a termination date. All service contracts (including listing agreements) must have a termination date.

What MUST all listing agreements have? a) at least 4% commission rate. b) a termination date. c) a buyer. d) a renewal date.

Quiz Level 10 c) a written agreement between two parties where one party agrees to provide a specified service to the other. A service contract is a written agreement between two parties where one party agrees to provide a specified service to the other.

What's a service contract? a) a specific form licensees use when the licensee will not perform any of the standard services mentioned in the agency disclosure form. b) a written agreement between two parties where one party agrees to hire another party as a salaried employee. c) a written agreement between two parties where one party agrees to provide a specified service to the other. d) a specific form licensees use when a service provider (such as a lender) is used in a real estate transaction.

Quiz Level 10 d) transaction coordinator agreement. A transaction coordinator agreement is a service contract that is used when a broker helps facilitate the paperwork in a transaction.

Michael is a licensed real estate agent who has been asked to help a buyer and seller complete the paperwork in a real estate transaction. Which service contract is he likely to use? a) buyer representation agreement. b) listing agreement. c) sales contract. d) transaction coordinator agreement.

Chapter 5: Transaction Coordinator Agreements and Their Key Paragraphs

After completing this chapter, you will be able to: . Define what a transaction coordinator is . Identify key transaction coordinator agreement paragraphs and explain their importance Why It Matters: Performing as a transaction coordinator in agency relationships can be quite precarious. The involved parties could become upset if the agent does not perform the appropriate fiduciary duties on their behalf. By understanding transaction coordinator agreements, you will be able to protect yourself from potential liability while performing as a transaction coordinator.

Chapter 4: Buyer Rep Agreements and Their Key Paragraphs

After completing this chapter, you will be able to: . Discuss how buyer agency works. . Discuss how a broker representing a buyer can be compensated. . Identify key paragraphs of buyer rep agreements. . Interpret the different sections of a buyer rep agreement. Why It Matters: In 2018, 87% of buyers purchased their home through a real estate agent or broker. This is a huge increase from 69% in 2001. Representing buyers means making $$$, and you're starting your real estate career to make some money, right? In this chapter, we'll be breaking down the agency agreements buyer's agents use to create agency relationships with buyers. We'll talk about the key paragraphs that appear in these agency agreements — buyer-agency agreements. Key Term: . protection period

Net Listing: A Refresher on the Illegal Listing

Wait, what about net listings? Didn't we discuss net listings back in the level on General Agency Principles?? Great memory, Yoni! Let's review. A net listing is a controversial form of agent compensation that is discouraged in many states and illegal in others, including the great state of Georgia. Net Listings: Pre-Determined Set Commission Amount This type of compensation agreement is one in which the seller pre-determines a specific amount that they will accept on the sale of their property. Anything that comes in over and above that amount is considered earned compensation by the broker. Net Listings: Why Are They Illegal: The reason that net listings are illegal is that they offer ample incentive for fraud or bad faith on the part of license holders who might be tempted to take advantage of sellers who don't realize the true market value of their property. The unscrupulous license holder could use that knowledge to convince the seller to sign a net listing below market, thus gaining themselves an oversized and ill-gotten payday.

A Review of the Big Three

We've discussed the three most popular listing agreements in Georgia. They are: . Open listing: a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell the property. . Exclusive right-to-sell listing: an agreement in which the seller guarantees the named broker receives a commission if the property is sold, regardless of who brings the buyer. . Exclusive agency listing: an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects. Commission Eligibility: Below is a helpful visual aid that shows how commission is split in various listing agreements. (Click it to get a better look!)

Facts of a feather Game c) open listing

. a nonexclusive listing agreement that gives multiple brokers and owners themselves the right to sell property. . owner, other brokers, and listing agent may earn compensation. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Facts of a feather Game a) exclusive right-to-sell listing

. the most exclusive form of listing agreement. . listing agent is guaranteed compensation if property gets sold. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Imputed Knowledge Paragraph

A client can only hold the broker and each of their supervised salespersons accountable for actual knowledge of a given property, not what they "should have known." In other words, you can't make the case that because the salesperson knew there was a leak, for example, then the broker should have known or vice versa.

Due Diligence

Another term that you might come across in written brokerage engagements that has contract law bearings is due diligence. Due Diligence Definition: Due diligence is a legal term used to describe the reasonable steps a person must take in order to satisfy a legal requirement. Due Diligence Can Look Like Different Things: Similar to performance, due diligence can look like different things for different real estate agents: . A buyer's agent notices the humungous hole in the ceiling of a property and tells his client, "Oh gee, we might want to check that out, buddy." . A listing agent notices the difference in dates on the MLS listing.

Brokerage Engagement: Expiration Date

As you might have noticed, Georgia really cares about brokerage engagements being tied to a specified service and termination date. The brokerage engagement is complete when either of the two following events takes place: . The specified service is complete. . The expiration date passes. Agency Agreements: Below, I've included a nice visual recap of the requirements of a brokerage engagement. (Remember, brokerage engagement = written agency agreement.)

Exclusive Right-to-Sell Listing

Exclusive right-to-sell listings are the most common and most preferred (by brokers) type of listing agreement. This type of agreement states that as long as the property is sold within the stipulated time frame of the contract, the listing broker named in the contract will receive a commission for their role as the agent in the real estate transaction. It does not matter how the sale is secured, whether by the named listing broker, another broker, or by the owner finding a buyer without the listing broker's assistance. Regardless, a commission must be paid to the listing broker who holds exclusive rights to the commission. Getting Paid in All Situations: Sign a seller to this type of agreement and, if the home sells before the agreement's expiration date, you're getting paid, plain and simple. . If the broker procures the buyer, the listing broker gets paid. . If a subagent, broker's agent, or buyer's agent procures the buyer, the listing broker gets paid. . If the seller procures the buyer, the listing broker gets paid. . If Elvis were to reappear and procure the buyer... well, you get the picture, right? Exclusive Commission Split for Cooperation: If a license holder other than the listing broker brings the buyer to the transaction in an exclusive right-to-sell listing, commissions are generally split, per the listing agreement instructions, between the listing broker and that license holder. This is an example of a cooperating broker — such as a buyer's agent who is representing the buyer in a sale. (Having never passed the state real estate exam, Elvis would not qualify for a commission split. Sorry, Elvis.)

Time Is of the Essence Paragraph

If a contract includes the phrase "time is of the essence" (in the termination option paragraph, for example), when it says the option period ends in five days, it will end at 5:00 p.m. sharp on the fifth day. Five minutes after 5:00 p.m. is too late. It is due as soon as possible! Failure to act within the specified time required would equal a breach of the contract.

Agency Agreements: A Review

Let's do a quick review of our earlier work on agency agreements. Agency Agreements: What Are They?: Let's start by defining agency agreements. An agency agreement is a mutual binding understanding between two parties that authorizes another party to act on their behalf. Now, let's break it down. Agency Agreements: What Do They Authorize?: In agency relationships, one party (the client) authorizes another party (the agent) to act on their behalf to accomplish a specific service (e.g., sell a home, buy a home). This authorization is done through a mutual agency agreement. Agency Agreements: How Are They Formed?: Agency relationships require the consent of both parties (the client and the agent) and can be entered into by one of three methods: . Written agreement ✏️ . Oral agreement 🗣 . Action 💃 Agency Agreements: Why Are They Important?: And while agency relationships can be formed several ways, written agency agreements are the very best way for agents to protect their commissions. It is much, much harder for an agent to recoup a lost commission for a real estate transaction for which they only had a verbal agreement.

More Details about Performance

Performance In Action: Performance can look like different things for an agent. It can look like: . A listing agent needing to find a buyer or a property for a seller 👀. . A buyer's agent assisting in the evaluation and due diligence of a property 🔎. . A listing agent assisting in the marketing of property for a seller 📰. . A buyer's or listing agent assisting their client in the negotiation of a property 💰. . A transaction coordinator assisting in the closing of a property 🚪. Performance: Tied to Compensation: An agent's compensation is typically tied to their ability to complete performance in a contract, so, as you might have guessed, agents care a whole lot about what their compensation is in the agency relationship agreement. Performance: Outlined in the Contract: To find out what is expected of themselves in order to fulfill a contract, agents can find their expectations outlined in the fulfillment clause of their written brokerage engagement.

Quiz Level 10 b) The listing agreement will renew on the 1st of January unless Sam notifies Andie otherwise. Agency agreements cannot have renewal dates or any provision that requires a client to discontinue a relationship after the expiration date passes.

Sam recently entered into a listing agreement with Andie, a real estate salesperson. Which of the following qualifications is ILLEGAL and CANNOT be part of their listing agreement? a) Sam has agreed to pay a 3% commission rate to Andie upon the purchase of a house. b) The listing agreement will renew on the 1st of January unless Sam notifies Andie otherwise. c) The listing agreement will expire on the 15th of February. d) Sam has agreed to exclusively list the house through Andie.

Introducing Limited-Service Agreements

So far, we've only discussed brokerage engagements. However, there is also a thing called a limited-service agreement. Brokerage Engagements and Limited-Service Agreements: . A brokerage engagement is a written agreement between two parties where one party agrees to provide a specified service for the other. . A limited-service agreement is an agreement between two parties where an agent agrees to provide a limited version of fiduciary duties. EXAMPLE: Randy is seeking to sell his home. He's already gone through the process of buying and selling homes several times in his lifetime, so he's pretty comfortable with the selling process. Plus, he's hoping to save some money on the commission rate a listing agent might normally charge. So, he's decided to hire a real estate agent as his limited-service agent. He'll pay the agent only to put his listing on the MLS since he cannot do it himself, as he does not have a real estate license. He'll pay the agent a smaller fee, and the agent will not be expected to do anything else for him as a client. To create this relationship, the agent and Randy will need to sign a limited-service agreement. Always and Only: A licensee will: . Always share a brokerage engagement with their client. Taylor, will you please sign this listing agreement so I can be your listing agent for your home? . Only share a limited-service agreement with a client if the client will NOT receive all of the services listed in a brokerage engagement. Taylor, we've agreed that I will not be offering you the service of marketing your property, as you can see in this form.

Additional Commission Terms Paragraph: Rights & Obligations

The last three sub-paragraphs focus on the rights and obligations of the cooperating broker, the broker, and the seller. Cooperating Brokers: This paragraph just clarifies that listing agents must still share the commission with cooperating brokers by paying the amount given earlier (if an amount is given). This sharing is true for all compensation scenarios. Commission Rights Survive Contract: Even if the agreement period ends, if a situation arrives where the listing agent is owed compensation, they are still owed compensation. This is calling out a protected period situation. Termination of Prior Broker: This paragraph protects the listing agent from a situation where a seller wrongfully terminated a previous listing agreement and still owes the previous listing agent compensation.

Agency and Brokerage Paragraph

There are different forms of agency that a listing broker can provide. Here the listing broker identifies which forms of agency they will not provide. Forms of Agency Refresher: Here's a refresher on the different forms of agency listed. . Seller's Agent: Represents the seller; owes the seller fiduciary duties. . Buyer's Agent: Represents the buyer; owes the buyer fiduciary duties. . Dual Agent: Licensee works for a brokerage that represents both parties; licensee provides a limited range of fiduciary duties to both. . Designated Agency: Only the named agent represents the buyer or seller; offers a full range of fiduciary duties to the client. . Transaction Coordinator: Licensee does not represent anyone in the transaction; owes no fiduciary duties

Transaction Coordinator Agreements: For the Paperwork

Transaction Coordinator Agreements: Our third example of a brokerage engagement is a little bit different than the previous two examples. Whereas the previous two agreements involve an agent representing the interests of a party, both the broker and seller hire a transaction coordinator to facilitate the completion of the paperwork in a real estate transaction. With a transaction coordinator agreement, the agent does not represent either the buyer or the seller. Information Within: The transaction coordinator agreement will contain the expiration date, expectations of the coordinator, and conditions for compensation. Not Provided by Georgia: Like the two brokerage engagement examples given earlier, the state of Georgia does not provide a promulgated form of transaction coordinator agreements.

Agency and Brokerage Paragraph: Designated Agency Disclosure

We've got a couple more agency and brokerage subparagraphs to go, champ! Stick in there. The Power to Designate: Listing brokers use salespersons to help them comply with their fiduciary duties. This paragraph informs the seller and gives the broker the ability to use salespersons in complying with their fiduciary responsibilities to the seller. No Knowns: The listing broker does not have any other relationships to disclose at this time.

Quiz Level 10 c) a limited time frame after an agreement ends where the broker is entitled to a commission if named prospective buyers return to purchase the property. A protection period is a limited time frame after an agreement ends where the broker may still be entitled to a commission if specified people that the broker had already shown the property return to purchase the property.

What is a protection period? a) a limited time frame during the inspection period where a buyer can back out of their sales contract without financial repercussions. b) the first thirty minutes of an open house where prospective buyers may enter and claim any personal property items to sell on the Internet. c) a limited time frame after an agreement ends where the broker is entitled to a commission if named prospective buyers return to purchase the property. d) a period before an agreement begins where a seller can sell their property without owing their listing agent compensation.

Facts of a Feather Level 10 b) transaction coordinator agreement.

. Is relatively new in industry. . Agent does not represent the interests of any client. . Facilitates paperwork in a transaction. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Facts of a Feather Level 10 c) all written agency agreements.

. Must have an expiration date. . Must be written and signed by both parties. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Facts of a Feather Level 10 d) buyer rep agreement.

. Between buyer and buyer's agent. . Has retainer fee clause, buyer default clause. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Facts of a Feather Level 10 a) listing agreement.

. Has property clause, listing price clause . Between seller and listing agent a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Level Assessment Level 10 d) extension clause. The extension clause can determine whether a buyer agent is owed compensation for a property purchased post the agreement.

A buyer purchased a home after the buyer agency agreement with their agent ended. However, this home was one they had toured with their former buyer's agent. Which clause will BEST determine if the former buyer's agent is owed compensation? a) property clause. b) legal description clause. c) parties clause. d) extension clause.

No Imputed Knowledge Paragraph

A client can only hold the broker and each of their supervised salespersons accountable for actual knowledge of a given property, not what they "should have known." In other words, you can't make the case that because the salesperson knew there was a leak for example, then the broker should have known or vice versa.

Designated Agency Disclosure Paragraph

A great way for a buyer's agent to prevent the potential conflicts of dual agency is to adopt a policy of designated agency. Under designated agency, the broker assigns salespersons to represent each party — preventing one person from attempting to act on behalf of both parties. Designated Agency Shoutout: Designated agency is a great way for both parties in a real estate transaction to have someone dedicated to representing their interests in an in-house transaction.

Dual Agency Paragraph: E

A safe method is just to always disclose information and to do it in a timely fashion. This paragraph highlights the importance of a buyer's agent to disclose timely information as it comes.

Facts of a Feather Level 10 b) transaction coordinator agreement.

Agent does not represent the interests of any client. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Liabilities Paragraph

As we discussed earlier in the chapter, the transaction coordinator does not represent either party. Consequently, they do not owe either party fiduciary duties. Clear Responsibilities and Lack of Liabilities: With this non-agency relationship, it's important for the coordinator to be released from the types of liabilities that would come with an agency (fiduciary) relationship.

Facts of a Feather Level 10 d) buyer rep agreement.

Between buyer and buyer's agent. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Facts of a Feather Level 10 a) listing agreement.

Between seller and listing agent. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

The Takeaway

By understanding buyer rep agreements and their key paragraphs, you've empowered yourself to be able to both successfully represent future buyer clients as well as protect your future compensation. Give yourself a pat on the back, Yoni. In Chapter 4, you learned: ✅ How buyer agency works ✅ Details regarding broker compensation ✅ Key paragraphs and sections of buyer rep agreements. You know what else I'm buying? This friendship, Yoni. Oh, and Chapter 5, where we'll learn all about the key paragraphs in transaction coordinator agreements.

Facts of a Feather Level 10 b) transaction coordinator agreement.

Facilitates paperwork in a transaction a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Facts of a Feather Level 10 a) listing agreement.

Has property clause, listing price clause. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Facts of a Feather Level 10 d) buyer rep agreement.

Has retainer fee clause, buyer default clause a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Broker's Policy on Agency Paragraph

If you will not be offering any of the agency relationships that are mentioned in the paragraph, then you should list them here so the buyer is aware. Agent Pro Tip: Your client might not know what these agency examples really mean, so explain what they mean! Transparency can help you gain the trust of a future awesome client.

Level Assessment Level 10 a) In a transaction brokerage agreement, no clients are being represented. A transaction brokerage agreement is an example of no agency, and in it, no clients are being represented.

In comparison to other agency agreements, what's a UNIQUE aspect of transaction brokerage agreements? a) In a transaction brokerage agreement, no clients are being represented. b) In a transaction brokerage agreement, ONLY the seller gets fiduciary duties. c) In a transaction brokerage agreement, expiration dates are NOT allowed. d) In a transaction brokerage agreement, the agency agreement can be renewed.

Level Assessment Level 10 d) transaction coordinator agreement. A transaction coordinator agreement

In which of the agreements below does the agent not have any fiduciary duties as the agent is not representing any clients? a) exclusive right-to-represent agreement. b) exclusive right-to-sell listing agreement. c) exclusive agency agreement. d) transaction coordinator agreement.

Facts of a Feather Level 10 b) transaction coordinator agreement.

Is relatively new in industry. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Level Assessment Level 10 d) performance. Performance is the fulfillment of an obligation, duty, or contract.

Janelle is a listing agent for the seller at 1302 Krollton Drive. She was able to help the seller through the entire process, eventually ending in a dream sales price. What is this BEST an example of? a) marketing plan. b) procuring cause. c) due diligence. d) performance.

Contract Workshop: The Story

Let's look at the buyer agency agreement of Jenny Deveza, who wants to purchase a home in Macon, Georgia. The agreement will start on the date of April 9, 2020, and will continue until July 9, 2020. The buyer's broker, Kelly Flores, will have an affiliated licensee, Andie Zhu, assisting her in the transaction. Andie is an independent contractor. Jenny agreed to give consent to her broker to assist in negotiating the terms of the purchase contract. Jenny agreed to give a non-refundable retainer fee of the amount of $500 as well as a 2% commission of the final sales price to Kelly Flores in the event of a sale. If Jenny enters into a lease instead, she agreed to give Kelly a $2,000 commission payment upon commencement of the lease. Jenny and Kelly agreed to a protected period of 10 days. Kelly's brokerage offers all agency relationships to their clients. Jenny current address is 1234 Krolton Drive., Macon, GA 31206. Jenny said you can contact her on her cell phone at (222) 222-2222 or [email protected]. Kelly's real estate license is #333333, and her brokerage, Aceable Realty, is located at 700 Seabrook Drive., Macon, GA 31206. Kelly's phone number is (333) 333-33333 and her email is [email protected]. The agreement was accepted at 5:00 pm on April 9th.

Contract Workshop: The Story

Let's look at the listing of Michelle Miller. She's ready to sell her house in Macon, Georgia. Here's what we know: Her house address is 1234 Gessner Ct., Macon, GA 31206. It's located in Lot 6, Block 2 of the Bluebonnet Fields subdivision in Bibb County. The Tax Parcel ID Number is C152-1200. Michelle said you can contact her via her cell phone (111) 111-1111 or email at [email protected]. Michelle and her broker Sandra Smith agreed to start the listing agency relationship on April 9, 2020, and for the agency relationship to continue until July 9, 2020, with a protection period of 30 days. They both also agreed that the listing price of $300,000 would be the initial asking price for her property. And in order to find prospective buyers, they both agreed that Sandra should post the property on the Middle Georgia Association of Realtors Multiple Listing Service. Michelle also authorizes Sandra to handle negotiations for her with offers and counteroffers, and Michelle will cooperate with Sandra in her efforts to market the property. After extensive negotiation with Sandra, Michelle agreed to pay a total of 4% in commission of the sales price. In turn, Sandra agreed to pay 2% to any cooperating broker who participated in the sale. Sandra's real estate license # is 222222, and her brokerage, Aceable Realty, is located at 700 Cooper St., Macon, GA 31206. Sandra's phone number is (555) 555-5555, and her email is [email protected]. As a broker, Sandra offers all types of agency relationships except for tenant and landlord agency. There are no special circumstances for the listing or purchase and sale of this property.

Governing Law and Agreement Paragraphs

Look, this agreement is pretty important. We've made that pretty clear. Governing Law: That said, this agreement still does take precedence over any state laws. Entire Agreement: This agreement is the entire and only agreement that binds the buyer and the agent together. Anything said or done outside of what is contained therein is not binding. And any modification or waiver requires the written agreement of the buyer to be valid.

Level Assessment Level 10 a) Michael and Heather. Compensation for agents is always negotiated by the agent and client.

Michael has a listing agreement with Heather, a seller. The listing agreement states that he is entitled to a 4% commission rate. Who determined this rate? a) Michael and Heather. b) Michael's local NAR board. c) Heather and the buyer. d) Michael and his broker.

Level Assessment Level 10 b) net listing. A net listing is an agency agreement (illegal in Michigan) where a seller agrees to pay a listing agent in compensation any amount that is over a certain limit.

Michael is a listing agent in an agency agreement where the seller has agreed to give him any money he receives in the sale of the house that is over $200,000. Which of the following BEST describes which agency agreement this is an example of? a) open listing. b) net listing. c) exclusive agency listing. d) exclusive right-to-sell listing.

Level Assessment Level 10 a) marketing plan. This is best an example of a marketing plan.

Michael is driving to meet a potential seller client. To impress them, he's brought some pamphlets to show off previous work and he's also identified a strategy for selling their house. What is this BEST an example of? a) marketing plan. b) performance. c) procuring cause. d) due diligence.

Dual Agency Paragraph: C and D

More on dual agency, Yoni. It's important stuff, though, so hang in there! Subparagraph C: 100% Optional: The buyer does not have to consent to a dual agency representation; the buyer has to opt in. In giving consent to dual agency, the buyer also is stating that they have read the agreement and understand the ramifications of their choice. Subparagraph D: Confidentiality: A broker, even in a dual agency relationship, is bound to the fiduciary duty of confidentiality and can be expected to not share any confidential information of the buyer (unless it is a material fact or is illegal).

Broker's Limits Paragraph: F and G

Ok, two more paragraphs that limit the liabilities of the buyer's agent. Limited to the Commission Amount: The broker's liability is limited to the amount they might get paid on this transaction. Don't Look at Me: The last subparagraph indicates that the buyer's agent should not be held responsible for things outside of their control — including the information provided by the listing broker.

Transaction Coordinator Contract Walkthrough

On the upcoming screens, we'll discuss the key paragraphs from a transaction coordinator agreement. Your Form May Vary: As you now well know, written brokerage agreements are not promulgated in Georgia — including transaction coordinator agreements. So, don't be surprised if your broker uses a different version. That said, there are key paragraphs that appear in most versions, and those are the paragraphs that I have highlighted. find in files: Caduri Properties LLC: Transaction Coordinator Agreement.

Answer 1) The commission of a real estate professional is always determined through negotiation between the real estate licensee and their client.

Question 1) Ultimately, who determines the commission of a buyer's agent?

Commission Paragraph: Show Me The Money

Reminder 1: As we discussed in the listing agreements chapter earlier, compensation rates are determined by agents and their clients. There is no determined rate for agent compensation. Reminder 2: As we also discussed in the listing agreements chapter earlier, an agent may earn compensation even if the sale transaction does not complete. If the compensation paragraph states that the agent must find the buyer a suitable property and the buyer's offer is accepted, but the buyer backs out on or before closing day, the agent may still be entitled to compensation. Always pay attention to that commission paragraph, Yoni.

Property Paragraph:

Similar to the listing agreement we studied earlier in the level, there is a property paragraph in this agreement, which appears in the second paragraph of the contract. Not Legal but Not Illegal Either: As is the case with listing agreements, this contract features a property paragraph — but with one significant difference. Listing agreements typically call for an address AND a legal description. This contract only asks for an address.

Exclusive Paragraph: "A Promise Ring"

The exclusive paragraph is setting expectations for the buyer agency relationship. The buyer is granting the buyer agent the exclusive right and privilege to locate a property for the buyer. All For You: This is the promise ring portion of the agreement. The buyer is promising that they are not currently in any other agreement with another broker. (This is important, as you will see below.) Other Brokers: If the buyer uses another broker, other than the listed broker, to locate a home — the buyer could be responsible for compensating the listed agent as well as the second broker who came along and made things happen!

Parties Paragraph

The intro paragraph of this agreement identifies the parties to the contract. For most agency relationships, the broker works for a party in the transaction, such as a buyer's agent working for a buyer or a listing agent working for a seller. However, in a transaction coordinator agency relationship, the coordinator does not work for anyone. The transaction coordinator simply facilitates the paperwork involved in a real estate transaction — the coordinator does not represent anyone or their interests in the agreement. Buyer and Seller: As you can see, this agreement asks for both the buyer and the seller to be named in the agreement. This is different than the previous agreements we examined where only one client was named. . Listing agreement: seller-agent. . Buyer rep agency agreement: buyer-agent. Contract Term: Here's another way in how this agreement is differentiated from the previous agreements. In previous agreements we looked at, there was a "starting date" and "ending date." In this contract, however, you will find an "entered into" date, which is the start date of the agreement. From there, the contract remains in effect until the specified duties of the transaction coordinator are completed, which typically occurs on closing day.

Broker Duties Paragraph

This paragraph answers the following questions: . What is the buyer expected to do in this relationship? . What is the agent expected to do in this relationship? . What duties must the agent perform to fulfill their responsibilities? The Duties: The buyer's agent is expected to complete the following duties: . Assist the buyer in finding the property of their dreams. . Comply with all applicable laws. Buyer's Choice: The last listed duty is optional, dependent on the buyer's preference. Here, the buyer can decide whether or not to allow the broker to assist in negotiating and the filling out of forms.

Retainer Fee Paragraph

This paragraph clarifies the agreement's retainer fee: a non-refundable form of compensation for buyer's agents. Future Credit Possible: If all goes according to plan, and a property is purchased, the broker will be compensated through the transaction's commission, and the retainer fee will be refunded to the buyer. Stays with Broker: If a property is not located, the retainer fee serves to compensate the broker for their work, and it would not be refunded. 100% Negotiable: Remember, all forms of compensation are always 100% negotiable between the client and the agent. Mostly a Buyer Agency Feature: Retainer fees are a feature of buyer agency as there is a greater risk for agents to show properties to "non-serious" buyers who never buy a property. A retainer fee helps some agents ensure their clients are serious.

Independent Contractor Paragraph

This paragraph clarifies the working relationships of those involved in this relationship. This includes the following (see below). Buyer and Broker: The buyer's agent is considered an independent contractor working on behalf of the buyer. The buyer's agent is not considered an employee. Buyer and Affiliated Licensees: If the buyer's agent has affiliated licensees working on their behalf in this transaction, the working relationship between the broker and licensees should be classified here. Note: Most working relationships between brokers and their affiliated licensees are that of independent contractors.

Notices Paragraph

This paragraph is all about communication in an agency relationship. Timely Responses: During a transaction, it's incredibly important for both parties to be responsive while communicating. This paragraph sets the expectation for the timely communication and availability of the buyer client. Approved Forms of Communication: How will the agent communicate with the buyer and vice-versa? This paragraph identifies how the approved forms of notice or communication are to be identified. Regardless of how communicated, the notices must be in writing.

Buyer Agency Term Paragraph: A Beginning and an End

This portion of the rep agreement identifies the starting and closing date of the agreement. State Requirement Requirement: It's a requirement in Georgia for all written brokerage engagements to have an expiration date, and the ending date in this paragraph satisfies this state requirement.

The Takeaway

To be honest, I would recommend being very careful about operating as a transaction coordinator. However, with a good understanding of transaction coordinator agreements, you should be able to protect yourself from potential liability while performing in this role. No matter the agency relationship, always set clear expectations, Yoni. In Chapter 5, you learned: ✅ The definition of a transaction coordinator. ✅ Key transaction coordinator agreement paragraphs and their importance. Yoni, you're so close to finishing this level on service contracts. What's left? A level summary video! Woo-hoo — get your popcorn ready!

Level Assessment Level 10 a) reasonable effort and due diligence clause, independent service provider clause, compensation clause. A transaction coordinator agreement is features no fiduciary duties. An independent service provider clause is indicative of a transaction coordinator agreement.

Using the process of elimination, which of the groups of clauses below is MOST LIKELY a transaction coordinator agreement? a) reasonable effort and due diligence clause, independent service provider clause, compensation clause. b) listing price clause, sign posting clause. c) retainer fee clause, buyer default clause, extension clause. d) listing price clause, sign posting clause, marketing permissions clause, compensation clause.

Level Assessment Level 10 c) exclusive right-to-sell listing agreement. Listing agreements are most likely to have a listing price clause, so exclusive right-to-sell listing agreement is the right answer.

Which of the agreements below is MOST likely to have a listing price clause? a) exclusive right-to-represent buyer rep agreement. b) exclusive agency buyer agreement. c) exclusive right-to-sell listing agreement. d) transaction coordinator agreement.

Protected Period Paragraph: C and D

We've got two more paragraphs on protected periods; you're almost there! Subparagraph C: Mutual Termination: This subparagraph addresses the situations where an agency relationship is terminated mutually... whether by the expiration of the agreement or a mutual termination by both parties. In both of these mutual termination situations, the protected period starts as soon as the agency relationship ends: either after the expiration date or the day the relationship was mutually terminated. Subparagraph D: Unilateral Termination: This subparagraph is a bit of a wild card. It addresses the specific situation where a buyer unilaterally terminates the buyer rep agreement early. In this case, the protection period still starts upon the termination of agency. However, the protected period will be extended to include both the previously agreed upon number of protection period days AND the remaining days in the contract, had it gone full term. So, in this scenario, the protected period would be calculated as follows: Protected period days + Days remaining in agreement = Protected period Subparagraph E: Who's Considered a Buyer: This subparagraph tries to protect buyer's agents from potential bad faith situations where buyers use family or business associates to purchase the home instead of themselves in order to avoid the protected period paragraph.

Quiz Level 10 a) to have someone looking out for their best interests in a real estate transaction. The principal reason a buyer seeks out a buyer's agent is to have someone looking out for their best interests in a real estate transaction.

What is the principal reason a buyer seeks out a buyer's agent? a) to have someone looking out for their best interests in a real estate transaction. b) because Georgia law requires all parties to a real estate transaction be represented. c) because a seller's agent is not allowed to operate as a dual agent in Georgia. d) because a buyer's agent is cheaper than an attorney.

Level Assessment Level 10 d) exclusive relationship with seller, seller can also procure sale. An exclusive agency listing agreement is an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects with a lower (or no) commission going to the listing broker.

Which of the groups of descriptors below BEST describes an exclusive agency agreement? a) many listing brokers, commission dependent on procuring cause. b) illegal, pre-determined acceptable sales price. c) broker guaranteed compensation no matter how property is sold. d) exclusive relationship with seller, seller can also procure sale.

Independent Service Provider Paragraph

When a real estate professional chooses to serve as a transaction coordinator in a real estate transaction, they are choosing to serve as an independent service provider. The coordinator is not serving as the agent for either party in the transaction. That's the whole point of the third paragraph of this contract — to make clear that this is a non-agency relationship. A Song for the Independent Coordinators: all the brokers, who are independent throw your transaction coordinator agreements up at me all the brokers, who making money throw your lack of fiduciary duties up at me.

Level Assessment Level 10 b) open listing. In an open listing, no broker has exclusive agency and a commission will be paid to the individual seen as the procuring cause of the sale.

Which listing agreement allows multiple real estate brokers (and the owners themselves) the right to sell the property, with a commission being paid to whomever is the procuring cause of the sale? a) exclusive agency listing. b) open listing. c) exclusive right-to-sell listing. d) net listing.

Level Assessment Level 10 b) an agreement in which the seller guarantees the named broker receives a commission if the property is sold, regardless of who brings the buyer. An exclusive right-to-sell listing is an agreement in which the seller has an exclusive relationship with a broker and agrees to pay a commission no matter who procures the buyer.

Which of the following BEST fits the definition of an exclusive right-to-sell listing? a) an agreement in which the seller names an amount they will accept for a property and the broker receives the excess. b) an agreement in which the seller guarantees the named broker receives a commission if the property is sold, regardless of who brings the buyer. c) a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell property. d) an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects.

Quiz Level 10 d) Salesperson Sam examined the buyer and seller's paperwork to ensure it was valid. Salesperson Sam examining the buyer and seller's paperwork to ensure it was valid is the BEST example of transaction coordinator work as it doesn't imply fiduciary duties or favor one party over another.

Which of the scenarios below BEST describes a licensee performing as a transaction coordinator? a) Broker Billy recently hired a new salesperson. b) Salesperson Sally negotiated the seller down in price for the buyer. c) Broker Bob performed a market analysis for his buyer client. d) Salesperson Sam examined the buyer and seller's paperwork to ensure it was valid.

Level Assessment Level 10 b) They are governed by BOTH agency law and contract law. Written brokerage engagements are governed by BOTH agency law and contract law.

Which of the statements about written brokerage engagements below is MOST accurate? a) They are governed by agency law. b) They are governed by BOTH agency law and contract law. c) They are governed by contract law. d) They are governed by broker law.

Disclosure of Properly Fraudulent Activities Paragraph

Yes, this agreement is pretty important and cool, but the law is still important and supersedes everything in this agreement. Let's see how in the two paragraphs below. Subparagraph A: Law-Abiding Licensees: Even if it might be detrimental to a buyer's real estate interests, the broker must report illegal activity — in this paragraph, the buyer gives the broker the right to do so. Subparagraph B: Not Fraud Experts: Even though the broker will look out for potential fraudulent activities, they are not fraud experts. There may be fraud occurring to which a broker is unaware.

Governing Paragraph

You can't create a legal document that supersedes the foundational legal documents of a society. This paragraph serves as a reminder — this agency agreement and the transaction are bound by the laws of the state of Georgia.

Facts of a feather Game c) open listing

a nonexclusive listing agreement that gives multiple brokers and owners themselves the right to sell property. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Facts of a feather Game d) exclusive agency listing

an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Answer 1) Listing price is the initial asking price of a property. Since listing agreements are about an agency relationship between sellers and agents, it is logical that paragraphs like listing price and For Sale sign paragraphs would be a unique feature of listing agreements.

question 1) Why might a listing price paragraph be a feature unique to listing agreements?

Brokerage Engagement = An Agreement to Provide a Service

Agency relationships are unique in that the relationship between the client and agent is focused on the completion of a service instead of the traditional ongoing employer-employee relationship. Clients look to agents for all sorts of real estate services, such as: . Listing their home 🏡 . Helping them buy a new house 🚛 . Leasing a retail space All About the Act: Agency relationships are all about agents completing acts of service that their clients require. On the next screen, we'll take a deeper look at Julio's family to see these relationships in action.

Hazardous Conditions Paragraph

During the marketing of the property, other parties may visit the property (e.g., open houses). This section protects the listing agent from potential liability. It puts the duty to protect primarily on the seller, so it might be good for you to advise your clients of this responsibility.

Special Circumstances Paragraph

Earlier, the seller identified any potential special circumstances that may affect the title of the property, such as bankruptcy, divorce, etc. The paragraphs below clarify the implications of those special circumstances. Third-Party Contingency: If, for example, the sale of the property is contingent upon getting approval from the courts or an ex-husband, then the responsibility for this lies with the seller. Buyers Not Bound to Confidentiality: Brokers are bound to keep the duty of confidentiality in a listing agreement. However, buyers and buyer's agents may discover confidential information during a transaction and are not bound by the same duty. EXAMPLE: A buyer finds out about a seller's divorce during a transaction and shares the information. No Lies: A broker owes fiduciary duties to their seller; however, they may never lie to a customer, even if it's on behalf of their client. Truth Prevails: If the duty of confidentiality to clients conflicts with the duty of honesty to all, the duty of honesty wins for a broker.

Quiz Level 10 b) exclusive right-to-sell listing. In an exclusive right-to-sell listing, the licensee is guaranteed compensation, no matter how the buyer is procured.

Melissa signed a listing agreement with Michael, a local real estate agent. Melissa was then contacted by a neighbor who agreed to purchase the house, but Michael still received compensation. What type of listing agreement did Melissa and Michael sign? a) open listing. b) exclusive right-to-sell listing. c) net listing. d) exclusive agency listing.

Exclusive Listing Paragraph

This paragraph sets expectations for the listing agency relationship. The seller grants the exclusive right and privilege to show and offer the property to the listing agent — no one else. Full Authority: The opening paragraph asks the seller to affirm that they have the full authority to sell the home. Sole and Entire Agreement: This agreement is it, Yoni. This agreement is the one binding the two parties. Note About Uppercase: As you can see, this paragraph introduces some terms which have specific definitions for this listing agreement. For example, "Seller" is used in quotation marks to signify that the use of "Seller" references the party who fills out the Seller portion of the contract.

Compensation Paragraph: Listing Agents

You're not volunteering to be a real estate agent, right? Well, the compensation paragraph is key for agents to ensure they get paid. Different Forms of Compensation: As you can see, there is no one set way that listing agents are paid by sellers. This compensation paragraph allows for a couple of different methods of compensation. 1. The listing agent is awarded a percentage of the final sales price. 2. The listing agent is awarded a set dollar amount. 3. The seller and listing agent write in another compensation option. (Surprise!) Always Negotiable: A listing agreement is a contract between the agent and the client; the client and agent are always able to negotiate the terms of compensation. Compensation terms are NOT set by the local Realtors board, nor are they set by the local government — the terms of compensation are always set by a client and their agent. Part of Final Sales Price: It's important to remind the seller that the final sales price includes your compensation rate. EXAMPLE: Casey was the listing agent for Susan, a homeowner who wanted to sell her rustic farmhouse on the outskirts of town. During their listing agreement negotiation, Susan and Casey agreed to a 6% commission rate of the final sales price. When the farmhouse sold for $100,000, the listing agent was owed 6% or $6,000 of that amount, leaving $94,000 for Susan (less any closing costs she incurred).

Facts of a feather Game a) exclusive right-to-sell listing

listing agent is guaranteed compensation if property gets sold. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Facts of a feather Game b) net listing

listing agent is paid any excess amount in the final sales total from a set amount. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Facts of a feather Game d) exclusive agency listing

listing agent or owner may earn compensation on sale. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Facts of a feather Game c) open listing

owner, other brokers, and listing agent may earn compensation. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Facts of a feather Game a) exclusive right-to-sell listing

the most exclusive form of listing agreement. a) exclusive right-to-sell listing b) net listing c) open listing d) exclusive agency listing

Quiz Level 10 d) They are promulgated by the state government. Buyer representation agreements, like all service contracts, are not promulgated by the state government.

In regards to buyer representation agreements, which of the following statements is NOT TRUE? a) They create buyer agency between the buyer and a buyer's agent. b) They must have a start and termination date. c) Signing the agreement turns the customer into a client. d) They are promulgated by the state government.

Potentially Fraudulent Activities Paragraph

In short, listing agents are not omniscient, but they are required to report any fraudulent activities that they see. Let's break this down by looking at Paragraphs A and B individually. Required to Report: The broker is responsible for following the law. They are required to report any fraudulent activities, even if it affects the transaction. Not Omniscient: Brokers are also not omniscient, and they may be part of a real estate transaction and be unaware of fraudulent activities.

Marketing Paragraph: Property Access

In order to best fulfill their duties as a listing agent, a listing agent will need to have access to the listed property. Giving property access permission will allow the listing agent to show the home to prospective buyers as well as potentially arrange necessary third parties (e.g., house inspectors, contractors) to access the property. The Lockbox: There is also usually a section of the agreement where the seller consents to the placing of a lockbox on it for entry when the occupant is not present. The use of a keybox will make life much easier for all parties involved in a real estate transaction. Agent Pro Tip: Always Get Permission: DO NOT access a seller's property without written consent from the seller. Otherwise, a listing agent is exposing themselves to huge potential liability if something goes wrong (i.e., a prospective buyer breaks an antique mirror).

Reasonable Effort & Due Diligence Paragraph: 4 - 6

Almost all real estate transactions will involve the use of an escrow account, and, as the transaction master, the transaction coordinator is pivotal in ensuring that it is completed. Escrow Opening: To have an escrow account, one must open an escrow account. - Escrow-title Escrow-title Translation: The transaction coordinator should ensure that an escrow account is opened. Escrow Requests: What is opened must also be managed. - Various great philosophers The transaction coordinator should inform all of the parties in a transaction of the escrow documents that are expected from them, and when they are expected. Buyer, you are expected to send a 10% down payment to the escrow account on the day of the closing. Here are the transfer details from the escrow account manager. - Transaction Coordinator Escrow Receipt: In a real estate purchase, a significant amount of money is transferred to an escrow account. For example, consider what a 20% down payment for a $300,000 loan might look like ($60,000). And with high amounts of money transferring, the coordinator will want to ensure that the right parties are receiving their amounts in the escrow process.

Reasonable Effort & Due Diligence Paragraph: The Duty List

And while a transaction coordinator does not owe fiduciary duties to the parties in the transaction because... well, the parties are not clients of the transaction coordinator, the transaction coordinator does owe the parties the following: reasonable effort and due diligence. On the next few screens, we'll break down what reasonable effort and due diligence mean in this transaction coordinator agreement by examining the duty list enumerated in this paragraph.

Between a Buyer and a Broker

Buyer rep agreements are written brokerage engagements made between a buyer and a broker. The seller is hiring an agent to sell their home. Buyer rep agreements are not sales contracts or lease agreements, even if the marketed property is sold or rented. Buyer rep agreements are governed by agency and governmental law. Authorizes Buyer's Agency Relationship: Buyer rep agreements create an agency relationship authorizing a license holder to represent the principal (the buyer or landlord) as they seek to find a property. These types of agreements impose upon the broker and their sponsored salespersons the fiduciary duties of obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care (remember the acronym OLD CAR?) to the principal. Obligations in a Buyer Rep Agreement: A broker generally agrees to provide all of the real estate services the client requires until the property is actually sold or rented. The broker might allow other people — sponsored salespersons, associate brokers, and cooperative brokers — to help carry out their contractual duties, provided they do so under the employing broker's supervision. (This, of course, is because the contract is between the seller and the broker, not the salespersons sponsored by the broker.) You Shall Be Called...: A buyer rep agreement creates a client (the buyer) and a buyer's agent (the broker).

The Takeaway

By understanding the key paragraphs of listing agreements, you'll be able to both successfully represent future seller clients as well as protect your future compensation. And that, Yoni, is the key to listing agreement success. In Chapter 3, you learned: ✅ The key paragraphs of listing agreements. ✅ How to walk through a listing agreement with a potential client. ✅ Why the key paragraphs of listing agreements are so important. I'm so proud, Yoni. So proud that I'd like to promote you to Chapter 4, where we'll learn all about the key paragraphs in buyer-agency agreements.

Extension Paragraph: "More Time Added to the Clock"

During an agency agreement period, the buyer may enter into a real estate contract with a seller that ultimately does not happen. The extension paragraph simply adds the days the buyer spent in the contract that did not come to fruition to the original agreement period. Scenario: Buyer Bob and Agent Anisha: A couple of shuffleboard friends highly recommended to Bob that he use Anisha as his buyer's agent in his search for a new home in their community. Bob met up with Anisha, loved her pitch, and ended up signing a buyer's rep agreement with her to represent his interests as a buyer's agent. The agency agreement stated that the agreement would expire in 30 days. During the agency agreement period, Anisha and Bob found a home that Bob loved. The seller accepted Bob's offer and everything seemed dreamy. However, the seller's children found out about the impending sale and demanded their parents give them the opportunity to purchase their childhood home. The sellers eventually backed out of the sale. When the sellers informed Bob and Anisha they would not be honoring the contract, seven days had already passed and they were nearing the 28th day of the agency agreement (only two days remaining!). Fortunately, for Anisha, per the extension period paragraph, seven additional days were tagged onto the end of Bob and Anisha's agency agreement. That gave her a total of nine more days to find a property for Bob during the agency agreement period.

The Buyer's Duties Paragraph

Duties are not just for brokers either. This paragraph lays out the duties that buyers owe their buyer's agents. Just the Two of Us: The buyer agrees to only work with the buyer's agent in searching for the property. Be Available: The buyer should be available to meet with the broker to view a property. I mean, if the buyer is always too busy, when will they ever see properties together? Respond in a Timely Manner: In order to work collaboratively, the buyer should respond timely to communications from the buyer's agent. Accurate Info: The buyer is responsible for providing accurate information to the buyer's agent. This is especially important as it pertains to the buyer's financial ability to purchase a property. (It's a waste of time for both the buyer and the buyer's agent if they spend time looking at properties that the buyer cannot afford.) Be Aware: The buyer should be self-aware while they are checking out properties in order to prevent the second-guessing of their purchase later on down the road. Be Familiar: The buyer's agent will educate the buyer during the purchase process. But ultimately the buyer is responsible for any documents they sign or decisions they make. They must make an effort to get familiar with all pertinent forms and decisions during this process.

The Birth of Buyer Agency

Earlier, we discussed the origins of what is known as buyer agency. Prior to the 1980s, the buyer in a real estate transaction did not have the option of representation. Not only that, but most did not realize they were NOT being represented by the friendly agent that was showing them properties. Both the listing agent and the cooperating agent — who might have been completely unaffiliated with the listing agent's brokerage — were representing the seller and looking out for the seller's best interest. (Poor buyer.) Self-Service: Now, truth be told, some buyers would prefer not to be represented, and that's okay as long as full agency disclosure is made by every license holder involved in the transaction. But there should never be a question as to who is representing whom. Going Ahead Without an Agent: Buyers who choose to go it alone (unrepresented) often have previous experience with real estate transactions, so they're not intimidated by the process. They often like the freedom of working with as many or as few agents as they choose. If they do need support with tasks like sourcing financing, scheduling home inspections, and finding desirable properties, they don't mind working with a seller's agent. The seller's agent, on the other hand, needs to tread carefully and not be so helpful that they undermine the best interests of their own client or inadvertently create an environment of undisclosed dual agency.

Coordinator Fees Paragraph

Finally, we get to talk about money. How does a transaction coordinator get paid? A Lil' Bit Different: As you might have noticed, the compensation paragraph for a coordinator agreement is a little bit different than those we previously studied for other types of agency agreements. While the previous agreements allow for several different methods for clients to pay their agents, the standard compensation agreement for an agent representing a buyer or seller is one that relies on a percentage agreement (commission). However, as you can see in this contract example, a transaction coordinator is paid a set fee. Who Pays What? As the coordinator is not the agent of the seller or the buyer, both parties will need to agree on who pays what portion of the coordinator's compensation. 100% Negotiable: And as always, all agent compensation is 100% negotiable between the clients and their agents.

Open Listings

Georgia has three legal forms of listing agreements: open listing, exclusive right-to-sell listing, and exclusive agency listing. First, we'll discuss open listings. A Definition: An open listing is a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell a property. The individual who is considered to have procured the cause of the sale is the one who will receive the commission. Open Listings = Multiple Open Agreements: An open listing basically provides a commission to the broker only if their activities bring about a sale. Sellers can enter into multiple open agreements with several brokers or even sell the property themselves. Sellers Might Believe It's in Their Favor: Some sellers believe that this type of listing works in their favor. Being listed with various brokerages means more prospects, and the seller will not be locked into paying a commission if the property is sold as a result of the seller's own initiative. Also, open listings may be terminated with any or all brokers at any time before performance. Downside: Does Not Motivate Agents: A downside to an open listing (for a seller) is that licensed real estate professionals will not be overly motivated to put time and money into marketing an open listing property, knowing they stand a good chance of not seeing any commission at the end of their efforts. The broker realizes that this unilateral agreement only rewards them for bringing a buyer - nothing else. Additionally, the expertise a real estate professional brings to a transaction came to that professional at a price. They will not be inclined to simply give away their hard-earned knowledge to an uneducated seller who is less than fully committed to the broker.

Disclosures Paragraph: C and D

Here are the final two parts of the disclosure paragraph. Subparagraph C: Honesty Over Everything: When choosing between keeping the confidence of their buyer or giving false info, the broker must choose honesty (over everything). Subparagraph D: No Known Knowns: The broker does not have any known agency conflicts. (Except, of course, the broker may represent other buyers, including buyers who are interested in the same property.)

Commission Paragraph: C and D

Here are the last two subparagraphs from the Commission Paragraph. Buyer Pays Commission: If the property's listing agreement does not agree to pay for the commission of cooperating brokers (cooperating brokers includes buyer's agents), then the buyer agrees to pay the buyer's agent their commission at closing. Added Cost: In the case of the buyer paying the commission of the buyer's agent, this cost is added to the final sales price. Up For Negotiation: As always, the compensation of the buyer's agent is up for negotiation between the buyer and the agent. The two common options involve either identifying a set amount or a percentage of the final sales price. Lease Commission: It's possible that the buyer may decide to lease a property instead of purchasing it — this final compensation paragraph designates a commission for the buyer in this situation.

Contract Workshop: The Story

Here's the scenario you'll need to refer to in order to fill out the transaction coordinator agreement. The transaction coordinator's name is Kyle Miller, the buyer's name is Ravi Patel, and the seller's name is Jerome Yoder. Jerome is selling his home on 53711 Grohl Street, Augusta, GA 30909. As part of the agreement, Ravi and Jerome have both agreed to pay half of Kyle's compensation for the transaction, which totals up to $4,000, or, $2,000 each. The contract was entered into on September 17, 2020.

Introducing Buyer Agency

I Get Buy With a Little Help: Some buyers want the help and guidance of a real estate professional. They want their interests looked after during every step of the process, from finding a home to negotiating an offer to closing on a deal. They want the representation that only a buyer's agent can give. They want to be a client and not just a customer. Compensation ≠ Representation: Recalling a topic touched upon earlier in the course, compensation does not equal loyalty or agency relationship. For that reason, a buyer's agent can be paid by the seller or buyer — or even both parties (with full disclosure and informed consent) and still be 100% loyal to the buyer.

Buyer Default Paragraph

If the buyer defaults during a contract (e.g. backs out on or before closing day), the buyer then owes compensation to the buyer's agent for their work in finding the property. Listing Agent Commission Too!: In addition, a defaulting buyer would owe the listing agent compensation as well. That' s a lot of moolah!

Level Assessment Level 10 d) the buyer is ultimately responsible for the compensation of the buyer's agent. If no compensation is allotted for buyer's agent compensation, the buyer is ultimately responsible for the compensation of the buyer's agent.

If there isn't an allotment for commission for cooperating brokers in the listing agreement, who pays the buyer's agent? a) the state commission on real estate. b) the local REALTORS board. c) the seller. d) the buyer is ultimately responsible for the compensation of the buyer's agent.

Reasonable Effort & Due Diligence Paragraph: 7 - 8

In a real estate transaction, the dates are very important. If a buyer or a seller doesn't sign a purchase agreement by the deadline on closing day, the other party could walk out on the deal. Transaction (Wedding) Coordinator: Similar to a wedding coordinator, the transaction coordinator is responsible for bothering reminding the parties of when and what they should complete. Home Warranty: Each transaction is different. If a seller has agreed to pay for a home warranty (or a buyer has decided they want to purchase one on their own), the transaction coordinator is responsible for ensuring that the warranty and other reports are ordered.

Buyer Rep Agreement: Recap

In contrast to the exclusive right-to-represent listing agreement in the previous chapter, did you notice that we never discussed a "listing price" paragraph? That's because, well, the agent is not selling a property, they are helping a buyer find a property. Unique Buyer Rep Agreement Paragraphs: In states where agency relationship contracts are not promulgated, buyer rep agreement can potentially contain paragraphs that are unique to that specific contract. In the walkthrough, for example, we discussed a retainer fee paragraph. A retainer fee paragraph protects a buyer's agent from potentially working with a buyer client without any compensation. (Pay me a non-refundable $300 upfront and, if we find your desired property, I'll count that towards my compensation.) While this seems like something every buyer rep contract would have, that's not necessarily the case. Common Paragraphs: All buyer rep agreements contain a few common and essential paragraphs. Here are the some we reviewed, along with the questions they answer: . Commission Paragraph: How much does the agent get paid and how? . Duties Paragraph: What is the agent supposed to do? . Protected Period Paragraph: What happens if the buyer buys a home after the agreement term expires that the agent had shown them during the contract period?

Quiz Level 10 a) Transaction coordinators cannot perform fiduciary duties for parties in a transaction. Transaction coordinators are middlemen and cannot perform fiduciary duties for parties in a transaction.

In regard to transaction coordinator agency relationships, which of the following is TRUE? a) Transaction coordinators cannot perform fiduciary duties for parties in a transaction. b) Transaction coordinators owe fiduciary duties ONLY to the first signing party. c) Transaction coordinators owe fiduciary duties ONLY to the seller. d) It is illegal in Georgia to perform as a transaction coordinator in a real estate transaction.

Marketing Paragraph: Copyright

In the effort to market the property, who owns the rights to what materials? Is anyone liable for these materials created for marketing? These are examples of the questions that this paragraph is trying to answer. Owned by the Creators: If the listing agent creates materials to market the property, the listing agent owns those materials. That's pretty straightforward — right, Yoni? Protection from the Misuse of Seller Materials: The seller might have some materials they want to provide in the marketing efforts of the property — yay! This paragraph helps protect the listing agent from any potential use by third parties of these materials or any claim by a third party against these materials, (e.g., a listing agent uses a brochure created by a seller but is later sued by a marketing firm in town, saying they are owed compensation for the creation of that brochure). Listing Agent = Chief Marketing Officer: It's important to know who is leading and coordinating the marketing efforts on this property. The last part of this paragraph establishes the listing agent as the lead in the marketing campaign by requiring the seller to get consent for any marketing efforts in regards to the listed property.

Listers Last

In this chapter, we'll be focusing on the agency agreement known as the listing agreement. "Listers last!" This popular axiom of real estate is built on the idea that real estate professionals who want to enjoy long and successful careers in the industry would do well to dedicate their time and talents to acquiring listings. Buyer clients are nice, but seller clients are where you want to focus. Why's that, you say? Read on... Listers Last: Here are some advantages of a seller-focused career: . Time: Per some industry experts, a license holder can service up to 4x as many listings as active buyer clients. . Marketing: Market to buyers; you only get buyers. Market to sellers; you get sellers AND buyers. (Unrepresented buyers checking out your listings might not buy that particular home, but it's likely they'll still use you to show them other properties.) . Cooperative sales team: Once your listings become public, every license holder in the area is a potential supplier of a buyer. Sure, you'll split commissions, but just think of the massive team you'll have working for you!

Negotiation Paragraph: Permission to Negotiate

In this paragraph, the seller authorizes the broker to perform on their behalf on various key aspects. This includes the following: All Inquiries Sent to Broker: A key aspect of this paragraph informs the seller that they should send all buyer inquiries to the listing agent. This ensures that the seller is properly represented by the listing agent, as the listing agent will know all of the offers that have been given for the property. It Goes Both Ways: The listing agent, in turn, has the fiduciary duty to disclose all offers to the seller. (More on this later.) Property Showings: Similar to most summer blockbusters, the property will be in high demand for showings from prospective buyers. This paragraph ensures that the seller agrees to show the property within reasonable times to the buyer. Accurate Info: The seller agrees to provide the listing agent with accurate information regarding the property. Comply with Laws: Sellers must also follow all applicable laws in a real estate transaction.

Dual Agency Paragraph: A and B

It's important for the buyer to be made aware of any possibility of a dual agency relationship in a transaction. With brokerages that represent buyers and sellers, it is possible that a buyer's broker could represent both parties to a single transaction. And in that case, the buyer's broker could owe both fiduciary duties to the buyer and the prospective seller. Let's break down what that means with the following dual agency paragraphs. Subparagraph A: Conflicting Interests: Where's the conflict, you say? Consider the following: A seller wants to sell their property for the highest price and a buyer wants to buy the property for the lowest price. If a broker represents both the seller and the buyer, they find themselves representing two parties with conflicting interests. Also, consider the built-in conflict of interest facing a buyer's agent. Since most agents earn a commission based on a percentage of the sales price, a higher sales price, which is not usually a good thing for the buyer, could be seen as a good thing for the buyer's agent. Subparagraph B: Disclosure of Adverse Material Facts: All known material facts must be disclosed to both parties (seller and buyer); this is true in all agency situations, including dual agency situations.

Quiz Level 10 c) broker and seller. Listing agreements are between the broker and principal (seller). Compensation is always a product of the negotiation between these two parties.

Jenna, a salesperson, and Melissa, a seller, recently signed a listing agreement. In exchange for meeting the conditions of the listing agreement, Jenna will earn a 3% commission rate. Who determined this rate? a) local brokers set the rate. b) local NAR chapter. c) broker and seller. d) broker and sponsored salesperson.

Quiz Level 10 a) Carly will receive compensation as long as someone agrees to purchase Jillian's property within the listing agreement's timeline. With an exclusive right-to-sell listing, the licensee is owed compensation as long as buyer is found within the listing agreement's timeline.

Jillian, a seller, has signed an exclusive right-to-sell listing with Carly, a licensed salesperson. Which of the following statements is MOST TRUE? a) Carly will receive compensation as long as someone agrees to purchase Jillian's property within the listing agreement's timeline. b) Carly will only receive compensation if she is the procuring cause of the sale. c) Carly will receive compensation as long as a tenant or buyer is found, regardless of the timeline. d) Carly will receive compensation ONLY if a buyer is found AND the seller is not the procuring cause of the sale.

Quiz Level 10 c) They will both need to agree to a new agency agreement in order for Sandy to provide her services; the previous agreement expired. Agency agreements are tied to the performance of a service, so the first agency agreement is no longer valid.

Julio is looking to upgrade his home after living there for three years. He previously used Sandy, a licensed agent in the area, to find his first home, and he would like to use her again. Which of the statements below are TRUE? a) Sandy and Julio are in an agency relationship as long as Julio never told Sandy that he was ending the agreement. b) As long as Sandy maintained her real estate license, Julio is beholden to use Sandy as his buyer's agent for his new house. c) They will both need to agree to a new agency agreement in order for Sandy to provide her services; the previous agreement expired. d) The agency relationship status completely depends on when the last email was sent.

Julio's Family: The Agent and The Nanny

Julio is trying to purchase a home; he is also looking for a part-time nanny to caretake for his two lovely children. For his home search, Julio entered into a buyer rep agreement with a licensed agent named Sandy. Julio also found Nancy, a nanny who has gotten great reviews on the local community messaging board. The Agent Relationship: After considering several houses, Julio and Sandy finally find the perfect house for Julio's family. And just like the buyer rep agreement states, a percentage of the home's sale goes to Sandy as her compensation. Cha-ching! The working relationship between Julio and Sandy ends after she helps him complete his desired action (buying a home). The Nanny Relationship: On the other hand, Nancy continues to look after Julio's children on the weekends. This working relationship between Julio and Nancy will continue until either Julio decides his children no longer need a nanny, or he decides he wants another nanny. What's the Difference?: Most employment relationships are ongoing and last for an indefinite amount of time. In contrast, agency relationships are formed to help a client complete an action and usually dissipate after the action is completed. If the desired action is not completed, there is a date upon which the relationship expires. Yoni, agency relationships expire.

Buyer Rep Agreement: Different Types

Just as a listing agreement can take the form of exclusive right-to-sell, exclusive agency, or open listings; buyer representation contracts can take the form of an exclusive right-to-represent agreement (also called exclusive buyer agency agreement), exclusive agency buyer agency agreement (try saying that three times fast), and open buyer agency agreement. Their definitions are very similar to listing agreements, just applied to buyer agency. Three Types: . Exclusive Right-to-Represent Agreement: an agreement in which the buyer guarantees the named broker receives a commission if the buyer finds a property. . Exclusive Agency Buyer Agency Agreement: an agreement in which the buyer has an exclusive relationship with a broker but retains the right to find the property on their own. . Open Buyer Agency Agreement: a nonexclusive agreement that gives multiple brokers (and buyers themselves) the right to find a property. Most Common: Exclusive Right-to-Represent Agreement: The most common type of buyer rep agreement in buyer agency is the exclusive right-to-represent agreement. And guess what? That's what we'll be studying for the rest of this chapter.

Reasonable Effort & Due Diligence Paragraph: 9 - 11

Keeping with the wedding coordinator metaphor, on the wedding day, the wedding coordinator is responsible for maintaining contact with all of the wedding parties and ensuring that they are on pace for their timelines. Groomsmen, I need you lined up in a tolerable sober state at 5:15 pm. Groomsmen, how are we doing here? I need you in a line in 10 minutes. Groomsmen, I need you now! . Wedding Coordinators Everywhere In a similar way, the transaction coordinator is responsible for being in constant contact with all parties in a real estate transaction. Hope your minutes roll over! Ensure Completeness: What's the use of having a bunch of papers in a folder if they aren't filled out? The coordinator is responsible for ensuring not only that the papers are filed, but that they are complete when filed. The Deliverables: Consider the deep questions of life, Yoni. . If a tree falls in the forest and no one is around to hear it, does it make a sound? . If a transaction file is completed and either party fails to receive the file, does it make a sound? These are the questions of life, Yoni. (There may be a few others.) And if you perform the services of a transaction coordinator, you are expected to make sure that both parties — buyer and seller — receive a completed file by the end of the transaction.

Additional Commission Terms Paragraph: A Lawful, Bona Fide, Written Offer

Let's break down the scenarios where a listing agent is owed compensation because the seller rejected a lawful, bona fide, written offer. In other words, scenarios in which a seller rejects a written offer but still owes the listing agent compensation. Meets Listing Price in Cash: The offer amount meets or exceeds the seller's desired listing price and can be made in cash (no need for a loan). No Strings Attached: The offer does not introduce any new contingencies, such as a longer due diligence period. No Strings Attached - Part 2: Again, no strings attached. A seller will owe a listing agent compensation for rejecting a buyer's offer if the buyer's offer does NOT include requests beyond those that the seller agreed to in the property disclosure statement and the legal requirement for a seller to convey a good and marketable title. Closing Date Window: The seller is in breach if they reject an offer due to a requested closing date that falls within a 30-day to 45-day window from the time of offer.

Open Listings and Beanie Babies

Let's bring this concept home with an open listings example involving Beanie Babies. Imagine the following two scenarios: Scenario 1: Melissa's 2% Commission with Conditions: Melissa has agreed to pay you 2% commission on the sale of her Beanie Baby, but only if you are the procuring cause of the sale. If she finds someone on Craig's List, or if a fellow Beanie Baby seller finds a buyer, they get the commission. Scenario 2: Aditi's 2% Commission With No Strings: Aditi has agreed to pay you a 2% commission the sale of her Beanie Baby, and you will get a 2% commission rate as long as someone buys the Beanie Baby. If she finds someone on Craig's List, or if a fellow Beanie Baby seller finds a buyer, you still get the commission. Recap Scenario: Question: Which scenario would more likely motivate you to spend your own time and money to ensure the Beanie Baby got sold? Answer: The one where you are guaranteed commission if a buyer is found!

What Exactly Is a Listing Agreement?

Let's go over what a listing agreement is, who signs it, and what that means for them. Between a Seller and a Broker: Listing agreements are written brokerage engagements made between a seller and a broker. The seller is hiring an agent to sell their home. Listing agreements are not sales contracts or lease agreements, even if the marketed property is sold or rented. Listing agreements are technically governed by employment law. The Listing Agency Relationship: Listing agreements create an agency relationship authorizing a license holder to represent the principal (the seller or landlord) and market the principal's property to customers (buyers or tenants). These types of agreements impose upon the broker and their sponsored salespersons the fiduciary duties of obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care (remember the acronym OLD CAR?) to the principal. Obligations in a Listing Agreement: A broker generally agrees to provide all of the real estate services the client requires until the property is actually sold or rented. The broker might allow other people — sponsored salespersons, associate brokers, and cooperative brokers — to help carry out their contractual duties, provided they do so under the employing broker's supervision. (This, of course, is because the contract is between the seller and the broker, not salespersons sponsored by the broker.) You Shall Be Called...: A listing agreement creates a client (seller) and a listing agent (the broker).

Broker's Limits Paragraph: C, D, and E

Let's review three more paragraphs that limit the liabilities of the buyer's agent. Read the Contract: Nothing Else: The broker owes the buyer only duties that are named in this contract; there are no magic unnamed duties. Disclosures: The buyer's agent is to make all required disclosures. This includes disclosing if their client is financially pre-approved to purchase a property. Not Your Mama: The buyer is responsible for their own duties and deadlines. (The broker is not the parent of the buyer.)

Commission Paragraph: A and B

Let's talk about the first two subparagraphs of the Commission Paragraph. Acknowledge the Custom: Normally, the commission for the buyer's agent is paid by the seller of a property through the commission allotted in the listing agreement* for the property. In this common scenario, the commission allotment comes from the final total sales price and is not an added cost to the buyer. Look to the Lister (and Their Agent): The buyer's agent is going to want to get paid. They'll try first to get paid from the commission allotted to the buyer's agent according to the listing agreement. Help the Buyer Beware: A buyer's agent should make the buyer aware anytime they are looking at a property that does NOT offer a commission to the buyer's agent since that expense will likely come out of the buyer's pocket (in addition to the purchase price of the property).

Reasonable Effort & Due Diligence Paragraph: 1 - 3

Let's think about what a transaction coordinator is hired to do. They are not hired to represent a client's efforts such as marketing their property. They are hired to ensure the paperwork of a transaction gets done; that's the job of the transaction coordinator. So, it makes sense that a transaction coordinator's job is to ensure that the paperwork is obtained and distributed and that all copies are made. Agent Pro Tip: Make the Copies: Making copies of paperwork is something that will save you a lot of time and stress in your real estate career. Always make the copies, Yoni. Review the Documents: The transaction coordinator is hired to ensure the paperwork is completed, so it makes sense they are expected to be the paperwork expert during the transaction. Every document should be reviewed to ensure that the proper signatures and forms have been filled out. Disclosure: As we reviewed earlier in this course, there is a significant amount of disclosures that must occur during a real estate transaction. The transaction coordinator is responsible for ensuring that the paperwork for any required disclosures is executed properly (e.g., a seller's disclosure statement).

Facts of a Feather Level 10 c) all written agency agreements.

Must be written and signed by both parties. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Facts of a Feather Level 10 c) all written agency agreements.

Must have an expiration date. a) listing agreement. b) transaction coordinator agreement. c) all written agency agreements. d) buyer rep agreement.

Aceable Contract Writing Style Guide

Now that you've reviewed the listing agreement contract, it's almost time for your first Contract Workshop of this level! It's a low-risk opportunity for you to practice filling out a contract using details from a fictional real estate scenario. Before I set you up with the instructions, take a look at the following style guide. It gives you some guidance on how to format and spell out items that you enter into contracts. Your future broker may have different preferences, but these are general best practices to adhere to for now. Names: . Write out the full names of the parties . No nicknames . Example: You wouldn't write "Mr. and Mrs. Ace Able" . Relationship of the parties should be noted . Example: "Ace Able and Grace Able, a married couple" Numbers: . Decimals: Always use a leading zero . Example: 0.2, not .2 . Digits: Use numerals instead of writing out numbers . Example: 3, not three . If the context requires it, use the ordinal indicators: 1st, 2nd, 3rd, etc. . Dates . Should include the month, day, and year (in that order) . Example: December 31, 2020 . Always use specific dates rather than phrases like, "three days later" . In signature fields, you can use the shorthand version of dates, but remember to include leading zeros . Example: 09/06/20 . Dollars . Use commas and decimal places where appropriate . Example: $2,500.50 Blank Fields: Not every box must be checked and not every blank must be filled. However, by using the abbreviation N/A (short for "not applicable") you can make it clear that you're deliberately not using that blank area, and have not simply forgotten it. . For paragraphs with no checkbox options: . Put N/A in all blanks that aren't used. . For paragraphs with more than one checkbox option: . For boxes that aren't checked, leave blank spaces blank. . For boxes that are checked, put N/A in any blank spots attached to that checkbox which will not be used. Headers and Footers: You may notice that some real estate contracts will include headers or footers featuring blank spaces where you can write the property address and/or get the parties' initials on every page. If you use a contract template with this type of formatting, make sure those areas are completed for each page.

Contract Workshop Instructions

Now's your opportunity to show off your newfound knowledge and skills by completing a sample contract on your own. Here's how it works... Read the Story: First, I'm going to provide you with a story about a real estate transaction. You'll have all the details you need to fill out the contract. Access the Blank Contract: You have two options for completing the contract: . On paper: If you have access to a printer, you can print out the blank contract and complete it using your pencil or (if you're feelin' pretty confident) pen. . On your computer: Similar to the math-intensive sections you did in Unit 1, I don't recommend doing workshops on your phone. If you've got one, switch to the larger screen of a tablet or laptop for a better experience. Select the image of the blank contract to open the pdf file in a separate tab. You will be able to directly edit the form in your browser by adding text to the blank fields and checking the boxes on the contract. Fill Out the Contract: Next, I'll ask you to fill out the contract accordingly. Refer back to the details of the story as you fill out the contract in a different tab on your computer or on the paper in front of you. If parts of the contract don't apply, leave them blank or write N/A. Answer the Quiz Questions: When you're done filling out the contract, you're ready to answer a few multiple-choice questions related to the contract. The questions will be very easy if you reference your completed contract as intended. If you skip straight to the questions without filling out the contract, they will be difficult to get right (and you'll be missing out on a great practice opportunity!). Check Your Answers: After answering the multiple-choice questions, you'll get to see an example of the completed contract with the correct answers. Ready to go? I know you are!

Buyer Rep Contract Walkthrough

On the upcoming screens, we'll discuss the key paragraphs from an exclusive right-to-represent buyer rep agreement. Your Form May Vary: As a friendly reminder, written brokerage agreements are not promulgated in Georgia. So, while I will be showing you an example of an exclusive right-to-represent agreement, you need to understand that your broker might use a different version. That said, there are several key paragraphs that typically appear in most versions, and those are the paragraphs that we'll be looking at. Easy Reference: It might be a good idea to open this document or print it for easy reference as we go through this.

Contract Workshop Instructions

Once again, you have an opportunity for you to show off your newfound knowledge and skill by completing a sample buyer rep agreement on your own. As you did with the listing agreement in the prior chapter, you will encounter a series of screens where you can: . Read the story: That's where you'll find every detail needed to fill out the contract. . Access a blank contract: You can print off the contract and fill it out old-school or fill it out on your computer by opening it in a different tab on your browser. (Don't try this on your phone, Yoni.) . Check Your Understanding: When you're done filling out the contract, you'll answer a few multiple-choice questions and then have a chance to compare your contract to one I've completed. Pro Tip: Instead of leaving a field blank, put "N/A" in the space provided. This makes it clear you did not miss that section of the contract. Ready to go? I know you are!

Contract Workshop Instructions

Once again, you have an opportunity for you to show off your newfound knowledge and skill by completing a sample transaction coordinator agreement on your own. As you did with the brokerage agreements in the prior chapters, you will encounter a series of screens where you can: . Read the story: That's where you'll find every detail needed to fill out the contract. . Access a blank contract: You can print off the contract and fill it out old-school or fill it out on your computer by opening it in a different tab on your browser. (Don't try this on your phone, Yoni.). . Check Your Understanding: When you're done filling out the contract, you'll answer a few multiple-choice questions and then have a chance to compare your contract to one I've completed. Pro Tip: Instead of leaving a field blank, put "N/A" in the space provided. This makes it clear you did not miss that section of the contract. Ready to go? I know you are!

Answer 1) A transaction coordinator agreement is designed for agents who will facilitate the paperwork of a transaction rather than attempt to represent the interests of either client in the transaction. It is a non-agency form of brokerage agreement.

Question 1) How is a transaction coordinator agreement significantly different than a listing agreement and a buyer rep agreement?

Answer 1) While a protected period paragraph in a listing agreement protects a listing agent from a seller selling to a buyer who previously visited the listed property during the agency agreement period, a protected period paragraph in a buyer rep agreement protects a buyer's agent from a buyer returning to a property they previously visited during the agency agreement period.

Question 1) How might a protected period in a buyer rep agreement differ than a listing agreement?

Answer 1) Buyer rep agreements are between buyers and agents. The purpose of a property ID paragraph is to identify the property that is for sale. But buyers aren't selling a property, they are looking for one (or more) to buy. For that reason, property paragraphs are a unique feature of listing agreements and NOT buyer rep agreements.

Question 1) Why isn't there a property ID paragraph in a buyer rep agreement?

Protected Period Paragraph: A and B

Remember our discussion on protected periods in the listing agreements chapter? Protected periods are a feature of buyer agency agreements as well. By way of reminder, a protection period is a limited time frame after an agency agreement ends where an agent can still be owed compensation. Protected Periods in Buyer Agency: In buyer agency relationships, protected periods happen at the same time (post-agreement) as listing agreements but they protect the buyer's agent from a different scenario. Protected periods aim to prevent agents from being cheated by a client who returns to homes they discussed during the buyer agency period so the clients would not have to pay the buyer's agent commission. EXAMPLE: Leslie, a licensed agent in the state of Georgia, showed several homes to her buyer client Ron during their agency agreement period. Ron did not want to renew their agreement, so Leslie stopped communication with Ron. Interestingly, Leslie noticed in the paper the following week that Ron had indeed purchased a property... one that they had visited while she was representing his interests. He had expressed interest in the property but suddenly changed his mind the following day. Armed with her buyer rep agreement, Leslie took Ron to court for the commission owed during the protected period... and she won! Subparagraph A: Name the Days: Right off, the buyer's agent and buyer agree to the specified number of days that the protection period will cover following the end of the listing agreement period. Subparagraph B: Protect That Property!: The protected period paragraph in a listing agreement (with a seller agent) focuses on identifying which buyers are "protected" in the protected period. The protected period paragraph in a buyer rep agreement, on the other hand, focuses on identifying what properties are "protected" in a buyer rep agreement.

Disclosure Paragraphs: A and B

This four-part paragraph covers the disclosures required of a buyer's agent. We'll start here with the first two paragraphs. Subparagraph A: Not Responsible for Sellers or Their Agents: A broker is obligated by their fiduciary duties to keep confidential any information given to them by a client that the client deems confidential (unless it is a material fact or illegal). However, the seller and their agent are not obligated to the same duty — this paragraph identifies this confidentiality risk. Subparagraph B: Nothing but the Truth: This might seem obvious, but we should discuss it since it's in the contract: Brokers should tell the truth.

Quiz Level 10 b) Use a listing agreement that is created or approved by an attorney. Since there are no promulgated listing agreement forms, the best practice for a broker who is entering into an agency agreement with a seller is to use one that is created or approved by an attorney.

Since there are no promulgated listing agreement forms, what is the best practice for a broker who is entering into an agency agreement with a seller? a) Create the ideal listing agreement yourself for your brokerage's agency company policy. b) Use a listing agreement that is created or approved by an attorney. c) Use a listing agreement found online from a competing brokerage. d) Work with the seller to create a listing agreement that both parties can be happy with.

Transaction Coordinator Agreement: Recap

That's it! We've covered all of the key paragraphs you might find in a transaction coordinator agreement. In the process, I hope you've gained an appreciation for the ways in which this type of brokerage agreement compares and contrasts with the others we've looked at. Let's review. Differences: A transaction coordinator's purpose is to help facilitate the paperwork of a transaction, and not to represent any of the parties of the transaction. That difference in purpose manifested itself in different ways: . There is no protection period in a transaction\ coordinator agreement because... well, there is no commission to protect! Whereas an agreement such as a listing needs to protect the commission of the listing agent after the agreement period ends, a transaction coordinator only works on the day of the transaction to facilitate the paperwork. . The transaction coordinator's compensation is usually an agreed-upon amount, and not a percentage of the sale, as is traditionally the case with buyer's agents and listing agents. . Transaction coordinator agreements feature independent service provider paragraphs, as they are a non-agency agreement that does not feature fiduciary duties. Similarities: There are also some similarities with listing and buyer rep agreements. . Parties Paragraph: Identifies the parties to the transaction. . Liabilities Paragraph: Releases the licensee from liabilities arising from the transaction. . Duties Paragraph: Identifies acts performed by the licensee in exchange for compensation. . Compensation Paragraph: Identifies who is paying what portion of the compensation owed to the licensee.

Buyer Representation Agreements: For the Buyers (and Buyer's Agents)

The Buyer Representation Agreement: Written agency between a broker and a buyer will usually take the form of a buyer representation agreement (also known as a buyer broker agreement) in which a buyer authorizes the broker and any affiliated salespersons to assist the buyer in the procurement of a property. Signing this agreement is when a buyer becomes a client (also known as a principal). From Caterpillar to Butterfly: Signing this agreement creates two new agency roles. Signing the agreement transforms: . The buyer customer into a client of the broker . The broker into a buyer's agent Information Within: A buyer representation agreement will contain information regarding: . The start and termination dates of the representation. . The duties of each party. . The expectations for compensation. Not Provided by State: The State of Georgia does NOT provide a buyer representation agreement. In other words, they do not promulgate this agreement (or any other service contract!). If you wish to use one to create written agency with a buyer, your best options are to use a buyer-broker agreement available through a state or local association of REALTORS®, or to create one with the help of an attorney. Your supervising broker should also have a buyer-broker agreement for their licensees to use.

Listing Period Paragraph: Beginning and End

The Listing Period = Starting Date to Ending Date: The listing period paragraph answers the following questions: . When does this agency relationship commence? (the starting date). . When does this agency relationship end? (the ending date). State Requirement: It's a requirement in Georgia for all brokerage engagements to have an expiration date, and the ending date in this paragraph satisfies this requirement. Limited Window: In most cases, an acceptable offer that results in a contract must be obtained during the listing term in order for an agent to be entitled to the negotiated fee or commission. EXAMPLE: Seller Sally and Listing Agent Lisa signed a listing agreement that detailed a listing period of 60 days. On the 50th day of the listing period, Seller Sally entered into a sales contract with Buyer Billy. Even if closing happens after the listing period, the sales contract took place during the listing agreement window, and the listing agent's commission is earned.

Marketing Paragraph: Permission to List

The Multiple Listing Service (MLS) is a powerful tool for sellers and listing agents in marketing properties. By authorizing the listing agent to post on the MLS, the seller is making their property available for search by buyers agents interested in the area. Clock Starts to Tick: Most listing agreements will have a portion stating that the listing agent will post the property on MLS within a set number of hours. As you can see, this listing agreement states that the listing agent will do it within 48 hours. Public Info: It's important for the listing agent to note that by posting this information on MLS, potential buyers may see the seller's listing information (address, list price) on the service. Although this is standard practice, it's still good to note so that the seller is aware, and you can avoid these types of conversations: "How does my cousin know that my house is up for sale?" "Is your cousin a member of the local MLS?" "Yes. Ah, it all makes sense now."

Listing Price Paragraph

The listing price paragraph sets the listing price of the property, which is the seller's desired gross sale price. The listing agent will use this price when marketing the property to prospective buyers. It's important for the listing agent to note two things. Listing Prices Are Set by Sellers: Listing agents can (and should) give their sellers advice on what is the best listing price to set for a property. At the end of the day, however, the listing agent is acting on behalf of the seller — the seller is the one who sets the listing price, and the listing agent is the one beholden to their wishes. (Remember the fiduciary duty of obedience from earlier in the course, Yoni?) Listing Price = Initial Asking Price: A property's listing price is merely the initial asking price, and not necessarily the price for which the property will end up selling. It's important to temper expectations and caution sellers that writing a listing price in the listing agreement doesn't mean the property will sell for at least that amount. Listing agreements are not fortune-tellers. Listing Price ≠ Net Proceeds: It's also important to note to the seller that the final sales price does not reflect the seller's net proceeds. The seller's net proceeds will be determined by the final gross sale price minus any unpaid real estate taxes, closing costs, remaining mortgage balance, any other liens or outstanding debts secured by the property, and any commission owed to you and cooperating agents. (More on commission to come!)

Broker's Limits Paragraph: A and B

The upcoming two paragraphs are titled as such because they limit the broker's authority and responsibility. More importantly, the two paragraphs limit the broker's liability. Let's check them out. I Think We Should See Other People: The buyer's agent will (hopefully, for their income's sake) represent more than one client. And since the buyer's agent may have similar clients, it is possible that they may show the same property to multiple clients. Cover Your Butt: The buyer's agent is not an expert in construction, property condition, or repairs. Nor should the buyer's agent ever mislead a buyer that they are an expert in these fields. This paragraph protects the buyer's agent from any claims related to this matter.

Protection Period Paragraph: More on the Buyer and Termination

These are the last two Paragraphs on the protection period, I promise, Yoni. Defining the Buyer: This paragraph defines what buyers fall under with this protected category and tries to protect listing agents from potential bad faith situations where buyers use family or business associates to purchase instead of themselves in order to avoid the protected period paragraph. After Termination: Upon termination of the listing agreement, the seller may work with other brokers who will be owed compensation if none of the protected period scenarios are true.

Limits on Broker's Authority, Responsibility, or Liability Paragraph

This one is a big paragraph with lots of subparagraphs, all serving to limit the liability of the broker. 19A: Other Buyers Are Invited: The listing agent can show the property to prospective buyers (as one might assume for a listing agent trying to sell someone's home). 19B: Not Liable for Non-Expert Areas: This is a lot, but, basically, the listing agent is not held responsible for things in which they aren't a professional (e.g., construction, a title search, etc.). 19C: Owe No Unlisted Duties: If the duty isn't listed in this agreement, then the listing agent doesn't owe the seller. 19D: Make Disclosures: Listing Agent is responsible for making all legal disclosures. 19E: Disclosures Are for Sharing: The listing agent will need to share this information with prospective buyers. 19F: Not the Seller's Parent: The listing agent is not responsible for ensuring that the seller meets their deadlines. 19G: Limited to Commission Amount for Liability: The listing agent's liability is limited to their commission on the transaction. 19H: Not Responsible for Others: If the seller tells the broker false info or the seller leaves out a bunch of cash on their bed during an open house, or something like that, well... the broker isn't responsible. 19I: Not the Voice of Seller: And as we have said many times in this course, while an agent represents their clients, the client is always the one who ultimately makes the decisions.

Arbitration Paragraph

This paragraph breaks down what happens if the listing agreement goes to arbitration. Bound by Federal Code: The Federal Arbitration Act 9 U.S.C. § 1 governs arbitration. Choose Three: In the case of arbitration, both the listing agent and the seller will select three arbitration companies. One Company in Common: If there is one company in common, that arbitration company is the company that the two parties will use. More than One Company in Common: If there is more than one company in common, there will be a coin flip to determine the arbitration company. Keep Adding Two: If both parties write down three arbitration companies, but there is no party in common, then both parties should write down two more arbitration companies. This should continue until a common company is found.

Marketing Paragraph: Posting Signs

This paragraph gives the listing agent permission to put a For Sale sign on a property. It's the Law: This might surprise you as it seems like common sense, but Georgia has an actual law that requires listing agents to get permission from sellers before they put a For Sale sign in a seller's backyard. So, if you get excited and place a For Sale sign in someone's yard before they've officially signed a listing agreement, you could technically be found to be operating outside of the law. Recap: Get the listing agreement signed before you plant the sign, Yoni.

Additional Commission Terms Paragraph: When Earned

This paragraph points out that if the seller enters into a contract with a buyer, the seller owes the listing agent compensation. And the compensation is owed upon closing. In other words, the seller needs to make sure the listing agent gets paid if the property gets sold. There's More to This Life than Selling: But wait, there's more! The remaining paragraphs clarify how listing agents can get paid even if they don't actually sell their listing. Other Scenarios: This paragraph points out the scenarios where a sale does not go through, but the listing agent is still owed compensation. This includes: . A seller entering into a contract with a buyer but then defaulting. . A seller entering into a contract with a buyer but then they mutually agree to terminate. . A seller rejecting a valid offer.

Independent Contractor Paragraph

This section clarifies the working relationship between the listing agent and the seller as one between an employer-independent contractor and not one between an employer-employee. The Price of Freedom: The seller won't be paying for your health insurance, but they also can't tell you how to live your life, Yoni. Freedom has a price.

Broker's Duties Paragraph: Your Responsibilities

To earn a paycheck, dishwashers have to wash dishes. To earn their commission, listing agents need to fulfill the duties listed in this paragraph. Disclosure: Remember the fiduciary duty of disclosure? Here it is in play again. Some of the disclosures that listing agents are required to make to their seller clients include: . All offers made on the property . A buyer's willingness to pay more . Whether the broker has a conflict of interest (also represents the buyer) . Any updates on offers and counteroffers Listing agents must also disclose any known material facts to both sellers and buyers. Ready, Willing, and Able: This phrase is key. Essentially, the broker's responsibility is to find a ready, willing, and able buyer for the seller... in other words, a buyer who wants to buy the property and has the means to do so. So, if a seller accepts an offer from a buyer, but later backs away before closing day, the listing agent might still be owed compensation. Note: Because typically offers are made below the listing price amount, most listing agreements have a paragraph noting that a listing agent's commission is earned when the seller accepts an offer below the list price. Comply with Laws: Listing agents must follow all applicable laws in a real estate transaction. Negotiation: If the seller chooses to give their listing agent permission to perform other duties (such as negotiate), then the listing agent is obligated to fulfill those duties.

New Kid on the Block

Transaction coordinator agreements are fairly new to the industry, and they serve a very different purpose than the agreements we've previously discussed. Instead of representing the parties in a transaction, a transaction coordinator represents the interests of a party in the transaction. Transaction Coordinator = Switzerland?: The continent of Europe was enveloped by warfare in the 20th century with World War I and World War II. Switzerland, however, famously remained neutral through both world wars, practicing a non-interventionist policy. From this history, Switzerland has become infamous for its neutral stances in cases. Living Out the Dreams of Switzerland: Obviously, the world of real estate is not an actual battlefield, but if you ever operate as a transaction coordinator, you should remember that you are living out the dreams of Switzerland (in real estate). The Middleman: As a transaction coordinator, your job is to be the middleman for both parties. You are not to give any advice or negotiate for either party — no parties are owed fiduciary duties. If you do, then you are violating your non-agency agreement and are at risk of losing compensation from the transaction. It can be very difficult to serve two parties — especially serving both parties in a way perceived as neutral by other parties and bystanders. For that reason, transaction coordinator agency relationships are not agency relationships that are recommended by many in the real estate industry. Coming Up: Now that we've taken a trip to Switzerland and addressed the role of a transaction coordinator and its duties (or lack thereof), let's move on to some key paragraphs that you might see in a transaction coordinator agreement.

Protection Period Paragraph: Timing

We've got additional sub-paragraphs to address on the protection period! The Clock Starts On...: 9C addresses the situations where an agency relationship is terminated, whether by the expiration of the agreement or a mutual termination by both parties. In both these mutual termination situations, the protected period starts as soon as the agency relationship ends: after the expiration date or the day the relationship was mutually terminated previous to the expiration date. Seller Terminates w/o Consent: This last scenario is a bit of a wild card. It addresses the specific situation where a seller terminates the listing agreement on their own. In this case, the protection period still starts upon the termination of agency. However, the protected period can actually be longer than the days specified above. In this scenario, the protection period follows the scenario below. protection period = protection period days + days remaining in agreement

Quiz Level 10 c) open. An open listing provides a commission to the broker only if their activities bring about a sale.

What type of listing provides a commission to the broker ONLY if their activities bring about a sale? a) exclusive agency. b) exclusive right-to-sell. c) open. d) net.

Special Circumstances Paragraph: Purchase and Sale of Property

When sellers compensate listing agents for helping sell their property, they almost always use the proceeds from the sale to compensate the listing agent for their services. But if the listing agent does not have a clear title to the property, their ability to compensate the listing agent from the sale proceeds is not as clear. This section helps the listing agent by making the seller clarify whether they do or not have a clear claim to the title.

Quiz Level 10 d) Felicia mailed out brochures of her listing to the neighborhood; one of the recipients contacted her to find out more about the property. Procuring cause is the defining action or actions that brought a buyer to purchase a property. In the case of Felicia, she procured the buyer of a property so she has procuring cause for the commission of that property.

Which of the examples below best demonstrates the principle of procuring cause? a) Aditi has a listing agreement for 6601 Marshall Lane that was recently sold. b) Heather made a killer listing presentation for her client, who signed at the end of the agreement. c) James recently signed a listing agreement with a seller. d) Felicia mailed out brochures of her listing to the neighborhood; one of the recipients contacted her to find out more about the property.

Level Assessment Level 10 c) an expiration date. Written brokerage engagement must have an expiration date.

Which of the following MUST a written brokerage engagement have? a) a provision requiring client to notify broker of their intention to cancel agreement upon or after expiration date. b) a general renewal date. c) an expiration date. d) an automatic renewal date.

Level Assessment Level 10 a) renewal date. A written brokerage engagement CANNOT have a renewal date.

Which of the following can a written brokerage engagement NOT have? a) renewal date. b) starting date. c) a protected period. d) expiration date.

Level Assessment Level 10 d) open listing. An open listing is an agency agreement between a seller and a listing agent where the listing agent is only guaranteed compensation if they are the procuring cause for the buyer.

Which of the following can be described as an agency agreement between a seller and a listing agent where the listing agent is only guaranteed compensation if they are the procuring cause for the buyer? a) net listing. b) exclusive agency agreement. c) exclusive right-to-sell agreement. d) open listing.

Level Assessment Level 10 b) buyer representation contracts can be exclusive buyer agency, exclusive-agency buyer agency contracts, or open buyer agency contracts. Just as seller representation contracts can take the form of exclusive right-to-sell, exclusive agency, or open listings; buyer representation contracts can be exclusive buyer agency, exclusive-agency buyer agency, or open buyer agency contracts.

Which of the following is TRUE about buyer representation contracts? a) buyer representation contracts can only be one of two types of exclusive contracts. b) buyer representation contracts can be exclusive buyer agency, exclusive-agency buyer agency contracts, or open buyer agency contracts. c) buyer representation contracts are always open buyer agency contracts. d) buyers do not have their own agency representation contracts but are covered under the listing agreements used.

Level Assessment Level 10 c) a plan created to secure the other party needed to carry out a real estate transaction that includes sales and advertising. A marketing plan is a plan created to secure the other party needed to carry out a real estate transaction that includes sales and advertising.

Which of the following is the BEST definition of a marketing plan? a) a legal term used to describe the reasonable steps a person must take in order to satisfy a legal requirement. b) the defining action or actions that brought a buyer to purchase a property. c) a plan created to secure the other party needed to carry out a real estate transaction that includes sales and advertising. d) the fulfillment of an obligation, duty, or contract.

Level Assessment Level 10 d) an agreement in which the seller names an amount they will accept for a property and the broker receives the excess. A net listing is an agreement in which the seller names an amount they will accept for a property and the broker receives the excess.

Which of the following is the BEST definition of a net listing? a) an agreement in which the seller guarantees the named broker receives a commission if the property is sold, regardless of who brings the buyer. b) an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects. c) a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell property. d) an agreement in which the seller names an amount they will accept for a property and the broker receives the excess.

Level Assessment Level 10 d) a legal term used to describe the reasonable steps a person must take in order to satisfy a legal requirement. Due diligence is a legal term used to describe the reasonable steps a person must take in order to satisfy a legal requirement.

Which of the following is the BEST definition of the key term due diligence? a) a plan created to secure the other party needed to carry out a real estate transaction that includes sales and advertising. b) the defining action or actions that brought a buyer to purchase a property. c) the fulfillment of an obligation, duty, or contract. d) a legal term used to describe the reasonable steps a person must take in order to satisfy a legal requirement.

Level Assessment Level 10 b) a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell property. An open listing is a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell property.

Which of the following is the definition of an open listing? a) an agreement in which the seller guarantees the named broker receives a commission if the property is sold, regardless of who brings the buyer b) a nonexclusive listing agreement that gives multiple brokers (and owners themselves) the right to sell property. c) an agreement in which the seller names an amount they will accept for a property and if the sales price exceeds that amount, the broker receives it. d) an agreement in which the seller has an exclusive relationship with a broker but retains the right to sell the property to named prospects.

Level Assessment Level 10 b) transaction coordinator agreement. A transaction coordinator agreement is most likely not to have a protection period clause.

Which of the written brokerage engagements below will MOST LIKELY NOT have a protection period clause? a) exclusive right-to-represent buyer rep agreement. b) transaction coordinator agreement. c) open listing agreement. d) exclusive right-to-sell listing agreement.

Level Assessment Level 10 d) open listing agreement. An open listing agreement is most likely to have a clause about procuring cause.

Which of the written brokerage engagements below will MOST LIKELY have a clause about procuring cause? a) exclusive right-to-sell listing agreement. b) exclusive right-to-sell buyer agency agreement. c) transaction coordinator agreement. d) open listing agreement.

Level Assessment Level 10 a) the seller. The seller ultimately determines the listing price for a property. The listing agent may guide the seller, but the seller ultimately is the person who makes decisions.

Who determines the listing price for a property? a) the seller. b) the buyer's agent. c) the listing agent. d) the buyer.

Listing Presentation and Marketing Plan

Why Me? But why would a seller choose you over another agent or broker? Well, if you put together a great listing presentation, you'll get their business. A listing presentation is your opportunity to pitch yourself and your services to a seller. Think of it as a job interview in which you are applying for the opportunity to sell someone's home. You'll need to gain the seller's trust by convincing them that you are trustworthy, hardworking, competent, communicative, honest, and have pretty much every good personality trait under the sun. But you'll also need to present a suggested price range to them based on your expertise of the local market. And you better know your stuff, Yoni, because if you inaccurately price a property, you may have some unhappy sellers on your hands. Marketing Plan: A Definition: During the listing presentation, you'll outline your marketing plan to potential seller clients. What's a marketing plan? A marketing plan is the sales and advertising plan you'll employ to attract a buyer for the seller. Marketing Plan: First Impressions: Your job is to convince the seller that you can employ a plan that will bring prospective buyers to their property. And how you market your skills to the seller will tell them a lot about how you will market their property to buyers, so be on top of your game from the beginning. Come prepared to your listing presentation with all of the materials, including: . A listing agreement filled out, ready to be signed . Pen (for the seller to sign) . Brokerage brochure (if they have one) . For Sale Sign (Be ready to put that sign in the front yard!) Marketing Plan: Target Audience and Platform: How will you be targeting buyers? Will you use social media to target prospective buyers? Your listing presentation is your opportunity to show off your marketing skills. And when you can, show them instead of telling them. Listing Agreement: The End Goal: Your goal in a listing presentation is to impress the prospective seller client so that you finish the presentation with them signing a listing agreement with you so you'll represent them and their property.

Level Assessment Level 10 b) a transaction coordinator does not represent the interests of either party to the contract nor owe fiduciary duties to either party. A transaction coordinator agreement is considered a non-agency contract because the broker does not represent the interests of either party to the contract nor owe fiduciary duties to either party.

Why is a transaction coordinator agreement considered a non-agency contract? a) a transaction coordinator agreement is not binding since it is always non-exclusive. b) a transaction coordinator does not represent the interests of either party to the contract nor owe fiduciary duties to either party. c) a transaction coordinator agreement is binding but never exclusive. d) a transaction coordinator agreement is valid but not binding.

Level Assessment Level 10 a) the broker has no fiduciary duties to either party, which requires the parties to take on more responsibility themselves. It's particularly important that a transaction coordinator agreement contain a clause outlining buyer and seller duties because the broker has no fiduciary duties to either party and, therefore, the parties must take on a greater degree of responsibilities in these types of non-agency agreements.

Why is it particularly important that a transaction coordinator agreement contain a clause releasing the broker from liabilities in the transaction. a) the broker has no fiduciary duties to either party, which requires the parties to take on more responsibility themselves. b) because transaction coordinator agreements are never exclusive, brokers are held less responsible. c) transaction coordinator agreements place a greater number of fiduciary duties on the broker than listing contracts or buyer agency contracts. d) transaction coordinator agreements are so new that most states haven't outlined what duties are owed by whom.

Key Listing Agreement Paragraphs: A Review

Woah, that was quite a journey of knowledge! Let's review some key concepts. Keeping it Exclusive: Did you notice that we never discussed a "procuring cause" paragraph in the agreement? That's because we were discussing an exclusive right-to-sell agreement, where agents are guaranteed compensation. Procuring cause is more likely to be mentioned in agreements where the client is working with multiple brokers, such as an open listing agreement. When Exclusive = Unique: In this review, we discussed some paragraphs that are pretty unique to listing agreements. You won't find them in other agreements covered in this level. That includes: . Listing price paragraph . For Sale Sign paragraph (permission to place) . Marketing permissions paragraph

Agency Law and Contract Law

Written brokerage engagements are governed by two law domains: agency law and contract law. Let's talk about how these two branches of law work together with brokerage engagements. Agency Law: As we discussed earlier in the course, there are rules and laws that oversee the practice of agency as well. Agency law covers: . The roles of an agent. . The duties of an agent. . And the agent's scope of authority. Contract Law: And as we also discussed earlier, there are also laws that oversee the practice of using contracts: . The validity of a contract. . How a contract can be terminated. . And the legal form of a contract. When Two Become One: Since service contracts are written agreements that oversee the practice of agency, it makes sense that these brokerage engagements would need to adhere to the laws that govern both branches.

Key Term Timeout: About Procuring Cause

You might have noticed that I used a fancy phrase in the previous section: "procuring cause." Procuring cause is a legal term used in some scenarios to determine whether an agent has a right to a commission. It's also a key term for this chapter. Let's go over procuring cause's definition and look at some examples of it in some real estate action. Definition: Procuring cause is the defining action or actions that brought a buyer to purchase a property. Featured in Some Listing Agreements: For some listing transactions, such as an open listing, a broker may have to prove that they were the procuring cause for a buyer in the transaction in order to earn compensation in a transaction. An open listing allows the seller to enter into agreements with multiple brokers, therein creating the possibility that a broker may need to prove that they are the one responsible for "producing" the buyer. EXAMPLE: Lisa wanted to sell her home. In the process, she entered into open listings with two fine fellows named Jermaine and Brett. Under this arrangement, either of them could have earned a commission on the sale of her home, but they would have to prove that they were the procuring cause for the sale. Jermaine showed the house to several buyers, and he even created a nifty mailing campaign — but no dice. Brett, on the other hand, just happened to run into a fellow named Murray on the street, holding a sign that said, "I Want To Buy A House." Brett took Murray to Lisa's home to show him around, and Murray eventually purchased the home. When it came time to determine who earned commission on the sale, it was clear that Brett was the procuring cause in bringing the buyer to the transaction. Consequently, Brett was rewarded the commission.