Real Estate Online - Listing Contracts

All of the following are true of an exclusive agency listing contract EXCEPT:

The answer is it always requires paying a commission. In this type of listing, no one earns a commission if the seller sells the property.

An owner of property gave a listing to a principal broker. Shortly thereafter, the owner died. In this case, the:

The answer is listing is immediately terminated. A listing may be terminated by death of the principal broker or seller, bankruptcy of the principal broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the principal broker and seller, or expiration of the listing period. Because listings create agency relationships, death of either party will terminate the listing, and the heirs are not bound to the contract.

In an exclusive right to sell listing, if the owner sells the property who gets the commission?

The answer is the listing brokerage. With an exclusive right to sell, the brokerage firm gets paid no matter who sells the property.

A salesperson for ABC Realty has moved to XYZ Realty. What happens to the listings the salesperson took at ABC Realty?

The answer is they belong to ABC Realty. The listings belong to ABC Realty, not the salesperson who listed the property.

To be valid, an exclusive right to sell listing must have:

The answer is a specific ending date. All listing contracts must be written and have a definite termination date to be enforceable in court. Liquidated damages are used in sales contracts only. The listing contract requires the brokerage to find a ready, willing, an able buyer to earn the commission.

To create a valid listing for the purposes of selling real estate, a broker must have:

The answer is a written contract. The Statute of Frauds requires listings of real property to be written. A power of attorney, which would authorize the broker to sign contracts on behalf of the seller, is not needed and is generally not given.

All of the following would terminate a listing EXCEPT:

The answer is death of the listing salesperson. The salesperson is not a party to the listing contract, which belongs to the brokerage firm. Therefore, his or her death does not terminate the listing.

The most common type of listing contract, which gives the brokerage firm maximum protection, is known as:

The answer is exclusive right to sell. The listing gives the maximum protection to the firm, since the firm will be paid no matter who sells the property.

A seller has signed a listing agreement with a brokerage firm to sell her home. By the terms of the agreement, the firm will definitely receive a commission if the home is sold by anyone during the listing period. This type of contract is called a(n):

The answer is "exclusive right-to-sell." The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner.

An organization of real estate brokers that exists for the purpose of exchanging listing information is known as a:

The answer is "multiple listing service." A "multiple listing service" is an organization of brokers who have agreed to exchange listings. The listing broker will be paid a commission if any member of the service sells the property, and will share the commission with the selling broker. Members of the service have a contractual obligation to distribute their listings to the other members.

A multiple listing may properly be defined as a listing agreement in which:

The answer is a broker with an exclusive listing has a contractual obligation to distribute the listing among certain other brokers. A multiple listing service is an organization of brokers who have agreed to exchange listings. The listing broker will be paid a commission if any member of the service sells the property, and he will share the commission with the selling broker. Members of the service have a contractual obligation to distribute their listings to the other members.

On the day of closing, the sellers inform the listing broker that they are not going to close and want to keep their home. The listing brokerage firm, in this case, is owed?

The answer is a full commission. The broker is entitled to the commission, since it was the seller's fault that the sale did not close. Liquidated damages is found only in purchase contracts and is tied to the buyer being in default.

ABC realty has a listed property for the price of $90,000. A buyer has instructed her agent to submit a written offer of $75,000. The buyer's agent refuses to submit the offer, which he felt was too low and a waste of his time. All of the following are true EXCEPT:

The answer is agent's are only required to submit offers they believe will be accepted. All agents must submit all offers made by a buyer to a seller or be in breach of their representation contract and license law. This broker did not give the seller an opportunity to negotiate a better offer.

A listing agreement between a brokerage firm and seller may be terminated by:

The answer is all of these. A listing may be terminated by death of the principal broker or seller, bankruptcy of the principal broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the principal broker and seller, or expiration of the listing period. Because listings create agency relationships, death of either party will terminate the listing, and the heirs are not bound to the contract. Bankruptcy and destruction of the property would make performance impossible, so they, too, terminate the listing.

In order to create a valid listing contract, who must sign the contract?

The answer is all property owners and the agent. All sellers and the listing agent, who represents the brokerage firm, must sign the listing contract. If only one of the property owners signs, the sale cannot include the full property, only the ownership rights of the party signing.

A listing agreement is:

The answer is an employment contract. A listing agreement is an employment contract. It authorizes the broker to try to find a buyer for the seller's property. It is not a purchase or option to sell contract.

The seller has given the brokerage firm an exclusive agreement that allows the company to earn a full commission upon the closing of the sale of the property, no matter who procures the buyer. This is know as:

The answer is an exclusive right-to-sell listing. The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner.

A listing that allows an owner to list concurrently with more than one brokerage firm is:

The answer is an open listing. An open listing provides that the broker will be paid a commission if he or she procures a buyer at terms listed or acceptable to the seller. It allows the seller to sell the property and to enter into listings with other brokers, since the seller's obligation is to pay the listing broker only if the broker procures the buyer.

A seller engages a real estate broker to find a buyer ready, willing, and able to purchase the seller's parcel of real property. The seller executes and delivers to the broker an exclusive right-to-sell employment contract. A few weeks prior to the expiration date of the employment contract, the seller decides to revoke the contract before any sale occurs and prior to the broker finding a buyer ready, willing, and able to buy the property. The owner:

The answer is can revoke this contract but could be liable for damages. No one can be forced to retain an agent he or she does not want, or represent a seller he or she cannot perform loyally for. Therefore, unless the agency is coupled with an interest, either the seller or the broker can terminate the listing at any time. However, if the broker will suffer a loss (e.g., advertising expense) the broker could sue to recover damages for his or her loss.

A broker's listing contract in the form of a letter addressed by the owner to the broker provides that the broker will be paid a commission if within 30 days the real estate is sold for $30,000 "by you, by me, or by anyone else." This:

The answer is creates an exclusive right to sell listing. The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner. Since the letter was in writing, it complies with the Statute of Frauds.

An agency listing agreement between the owner of real property and a real estate broker:

The answer is does all of these. An agency listing is an employment contract establishing an agency relationship between the broker and seller. An agency relationship is a fiduciary relationship. A fiduciary relationship is a position of trust and loyalty, which an agent has with regard to the client. Since the listing establishes an agency relationship only for the purpose of securing a buyer, it must define the agent's authority and responsibility as well as the seller's responsibility when the broker performs the required acts.

If the task the broker was hired for is not completed, the listing contract:

The answer is ends on the expiration date. Listing and buyer's contracts terminate upon the expiration date. Listings may not be transferred between firms.

Which type of listing allows the broker the right to collect a commission if any other brokerage firm brings a buyer but not if the seller obtains the buyer?

The answer is exclusive agency listing. An exclusive agency listing provides that the broker is entitled to a commission if any other real estate professional sells the property. This allows the owner to sell the property himself and not be liable for a commission.

The owner may sell her own property without paying a commission if the agent is appointed by means of an:

The answer is exclusive agency. In exclusive agency, the seller does not pay a commission if she sells her property. Only under an exclusive right to sell is the brokerage firm paid no matter who sells the property.

A type of real estate listing in which the brokerage firm receives a commission unless the seller sells the property is know as:

The answer is exclusive agency. In this type of listing, the firm and co-op brokerages will be paid if they sell the property. No one earns a commission if the seller sells the property.

The owner agrees to pay a commission to the agent if the property is sold by anyone during the listing period under the terms of an:

The answer is exclusive right to sell listing. In an exclusive right to sell listing, the seller agrees to pay a commission no matter who sells the property.

The principal broker at XYZ Realty has told her salespeople to try to only sign listing contracts that give the firm the most protection. In this case, the salespeople should be trying to get what type of listings?

The answer is exclusive right-to-sell listings. An open listing provides for the broker to be paid a commission if he or she procures a buyer at terms listed or acceptable to the seller. It allows the seller to sell the property himself and to enter into listings with other brokers, since his obligation is to pay the listing broker only if the broker procures the buyer.

A broker is entitled to a commission regardless of who sells the property during the listing period if he or she has which of the following listings?

The answer is exclusive right-to-sell. The exclusive right-to-sell provides that the broker will be paid a commission regardless of who sells the property, including the owner.

In an exclusive right to sell listing where the broker procures a ready, willing, and able buyer whose offer has been accepted, but the sale is not closed, the brokerage:

The answer is has earned a commission. The commission has been earned and will be paid at closing, and if the seller refuses to sell, the brokerage firm can sue the seller for the fee owed.

The advantages of being a member of an MLS include the fact that members get wider exposure of properties and:

The answer is have more properties to offer to buyers. MLS services offer more exposure to properties, which benefits both the seller and buyers. No fees are automatically set.

If a brokerage produces a ready, willing, and able buyer at the seller's terms and the seller refuses to sell, the commission:

The answer is is earned by the broker. The commission has been earned when a ready, willing, and able buyer at the seller's listing terms is found. Most of the time, the listing brokerage must also have an accepted sales contract to earn the commission without having to sue the seller.

If the listing broker procures a ready, willing, and able buyer but the sale fails to close because of a failure on the part of the seller, the commission:

The answer is is earned by the broker. The commission has been earned when a ready, willing, and able buyer at the seller's listing terms is found. Most of the time, the listing brokerage must also have an accepted sales contract to earn the commission without having to sue the seller.

If a sale fails to close because of a failure on the buyer's part, the listing broker's commission:

The answer is is not earned. The commission has been earned when a ready, willing, and able buyer at the seller's listing terms is found. If the buyer fails to close, the commission is not be earned.

With an open listing, a commission is paid to the brokerage who:

The answer is is the procuring cause of the sale. An open listing is a nonexclusive listing that allows a number of firms to list the property, but only the firm that is the procuring cause of the sale earns the commission.

Which of the following is usually correct regarding listing contracts between a real estate broker and a seller?

The answer is it must be in writing to be enforceable in court. Only written listing contracts are enforceable in court.

The safety clause protects the:

The answer is listing brokerage. The safety (or protection) clause entitles listing firms to commission for those buyers they showed the property to before a listing expires who sellers later accept an offer from. Typically, the listing broker must give written notice to the seller of the names of buyers the provided before the listing expires.

A listing broker receives his authority to accept an earnest money deposit in the:

The answer is listing contract. The listing contains the authorization of the broker to act on behalf of the seller. Therefore, if the broker is authorized to accept a deposit, this authorization is contained in the listing agreement.

Which of the following is NOT a strict legal term for a type of employment contract or listing?

The answer is multiple listing. A multiple listing is an exclusive listing sent to a multiple listing service. It is not a form of listing agreement.

In order to be enforceable, an exclusive listing for residential property:

The answer is must be signed by all owners and the listing agent. The listing must be in writing and signed by the owner and listing agent. The exclusive listing may contain words specifying the fact that the brokerage would be entitled to a commission regardless of who sold the property, without ever stating "exclusive right to sell."

The listing agent, when setting a showing with a buyer's agent who will earn a co-op fee,:

The answer is must still disclose hidden defects. Listing brokers may not share confidential information, and must fully disclose all material facts and treat all parties fairly.

The length of a safety clause in a listing agreement is determined by:

The answer is negotiation between seller and broker. The safety clause, like all other items in the listing, is negotiated between the broker and seller. The length of a safety clause is not regulated by law or the Commission.

To earn a commission, a listing broker with any exclusive listing must procure a ready, willing, and able buyer at the seller's listing terms and:

The answer is nothing else. The commission has been earned when a ready, willing, and able buyer at the seller's listing terms is found.

For a brokerage to earn a commission, a ready, willing, and able buyer must offer to buy:

The answer is on terms accepted by the seller. If the seller accepts an offer, the listing broker has earned a commission, even if the terms differ from the listing.

The type of listing that allows more than one brokerage firm to list the property is know as a(an):

The answer is open listing. An open listing is a nonexclusive listing that allows a number of firms to list the property, and only the firm that is the procuring cause of the sale earns the commission.

An owner signed a listing with a broker where it was understood that, if the property were sold through the efforts of any other broker or the owner, the listing broker would not be entitled to a commission. This kind of listing contract is called a(n):

The answer is open listing. An open listing provides for the broker to be paid a commission if he procures a buyer at terms listed or acceptable to the seller. It allows the seller to sell the property himself and to enter into listings with other brokers, since his obligation is to pay the listing broker only if the broker procures the buyer.

A multiple listing service is a(n):

The answer is organization for exchanging information and sharing fees. The MLS allows brokerage firms to exchange property information and set co-op fees for the sale of property.

The difference between an exclusive right-to-sell listing and an exclusive agency listing is that in the exclusive agency listing, the:

The answer is principal will owe no commission if the principal sell's the property on his or her own. An exclusive agency listing provides that the broker is entitled to a commission if any agent sells the property. This allows owners to sell the property themselves and not be liable for a commission. Under an exclusive right-to-sell listing, the broker is entitled to the commission if anyone, including the owner, sells the property. Either type of listing may provide that the agent will pay promotional expenses (or may provide that the seller will do so). The seller has the right to sell on his or her own property, in either case. The exclusive agency listing provides that the seller does not owe a commission if he or she does sell the property. The exclusive right-to-sell listing provides that the seller owes a commission if he or she does sell the property. It is false to imply that the agent would not be paid under any circumstance.

Membership in a multiple listing service is an advantage to.

The answer is sellers, buyers and brokers. All parties benefit when properties are listed in the MLS.

An independent broker has sold her company to XYZ Realty. What happens to the active listings she has?

The answer is she cannot transfer her listings. Contracts for personal services, including listing contracts, cannot be assigned. Therefore, the listings cannot be transferred to another brokerage firm.

A broker had an open listing on a house. To collect a commission, she would have to prove all of the following EXCEPT:

The answer is she has the only open listing on the property. To get a commission on an open listing, the broker must have a license, find a buyer, and be the procuring cause (the one whose efforts produced the offer). Other brokers may also have open listings on the property at the same time, but only the procuring cause broker will earn the commission.

A salesperson wants to show a property twice in one day. The second time she:

The answer is should call the listing broker again. Every listing appointment must be cleared through the listing brokerage firm.

ABC Realty has an exclusive agency listing on the seller's property and has put it in the MLS. A salesperson from XYZ Realty brings an offer, which the seller accepts, and the transaction closes. The commission will be:

The answer is split between the two brokerage firms, per the MLS terms. In an exclusive agency listing, the brokerage firm who lists the property (ABC Realty) will receive a commission if anyone other than the seller sells the property. In this case, since the property was listed in the MLS, the commission is split between the two firms, based upon the local MLS agreement.

A seller signed an exclusive right-to-sell listing for his residence for a term of 6 months with a local brokerage firm. The price was set at $30,000; the commission was to be 6%. During the listing period, the house was destroyed by a fire. Under these circumstances:

The answer is the firm is not entitled to a commission, and the listing is terminated. Real estate listings create employment or personal service contracts, which are terminated by death of the broker or seller, bankruptcy of the broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the broker and seller, or expiration of the listing period.

All of the following are true of an exclusive agency listing EXCEPT:

The answer is the owner must pay a commission if the property is sold directly by the owner.

A seller gave two firms an open listing on her home. Firm #1 advertised the property but did not show it to any prospects. Firm #2 showed the property to one prospect, but before the firm obtained an offer the seller sold it to a friend. Which of the following statements is correct?

The answer is the seller owes nothing to either firm. Only the party procuring the buyer gets paid in an open listing. The seller owes nothing.

A seller signed a 90-day listing for his property with a salesperson for ABC Realty. One month later, the seller died. At the same time, the salesperson received an offer for the property. Which of the following is correct concerning the offer?

The answer is the seller's estate is not required to sell the property or pay a commission. A listing may be terminated by death of the broker or seller, bankruptcy of the broker or seller, destruction of the property, performance (producing a ready, willing, and able buyer), mutual consent of the broker and seller, or expiration of the listing period. Because listings are employment contracts, death of either party will terminate the listing, and the heirs are not bound to the contract. Death terminated the listing and all obligations under it.

Exclusive listing contracts are all of the following EXCEPT:

The answer is unilateral. A unilateral contract is binding upon only one party. Valid listing contracts are express, bilateral agreements. They terminate upon the death of the broker or the principal. A written contract is an express contract. Both the seller and broker make promises.

MLS rules typically require that acquired listings:

The answer is usually be turned over to the service. Most MLS services require the listing broker to add new listings within 24 to 48 hours of obtaining them, unless the seller states differently. Co-op fees, like all fees, are not set by the MLS, but by the seller and listing brokerage.

A listing or buyer representation contract terminates:

The answer is when the property is closed. Listing and buyer's contracts terminate when the seller or buyer close on the property.

To be enforceable, a listing must be:

The answer is written. All listing contracts must be written and have a definite termination date to be enforceable in court.

A broker had an open listing on a property and showed the property to a buyer. Thirty days later, the buyer negotiated directly with the seller and purchased the property at a price equal to the listed price less the commission that would have been paid. Has the broker earned a commission?

The answer is yes, under the doctrine of procuring cause. The broker was the person who introduced the buyer to the seller and was the procuring cause and should receive a commission.