Lesson 8: Listing Agreements: Pop Quiz

Harry and Samantha are living in a lovely home beside a lake. They decide they want to move closer to the city, so they set up an appointment with a real estate agent. Samantha is a doctor, and she's called out on a medical emergency shortly before the agent arrives. Harry chats with the real estate agent and decides he's ready to sign a listing agreement. Harry owns the house in severalty. The agent should have who among the following sign the listing agreement? A.Harry B.Samantha (when she's available) C.Harry and Samantha, as tenants by the entireties D.Harry and Samantha, as tenants in common

A.Harry Since Harry is the sole owner, only Harry needs to sign the listing agreement. However, even if a married person owns property in severalty, it's safest to have the spouse sign too.

To be valid, a listing agreement may be signed by: A.an attorney in fact B.the buyer C.the designated broker only, with the owner's authorization via telephone D.the licensee only

A.an attorney in fact A listing agreement needs to be signed both by the listing agent, on the listing firm's behalf, and by the seller. An attorney in fact, someone the seller has appointed in a power of attorney and granted the authority to convey the property, may sign the listing agreement on the seller's behalf.

A licensee takes a listing for a house that is owned by a married couple. The husband is working overseas in the Middle East for the next two years. The wife can sign the listing agreement for her husband: A.as long as he has given her a power of attorney B.as long as he is overseas for work purposes and not for pleasure C.if they were originally married in a state that does not follow the law of community property D.under any circumstances

A.as long as he has given her a power of attorney Ordinarily, all co-owners of a property need to sign an agreement to list the property. However, if the husband has given the wife power of attorney to sign documents on his behalf in his absence, the wife would be able to sign for him.

All of the following are required for a valid listing agreement, except the: A.buyer's signature B.seller's signature C.real estate agent's signature D.signature of every owner of the property

A.buyer's signature The real estate agent and the property owners (the sellers) must sign the listing agreement. However, the buyer is not a party to the listing agreement, and her signature is unnecessary.

An exclusive listing agreement is an example of a/an: A.express contract B.illusory contract C.implied contract D.unilateral contract

A.express contract A listing agreement is an express contract (an express contract is one that is stated in words--written or spoken--rather than implied by actions, and a listing agreement is stated in words: it's a written agreement). Unlike an open listing, an exclusive listing agreement is a bilateral contract, not unilateral.

Some real estate contracts are between the real estate agent and the principal; others are between the buyer and the seller. All of the following contracts are between the agent and a principal, except a/an: A.multiple listing service agreement B.open listing C.exclusive right to sell listing D.net listing

A.multiple listing service agreement A multiple listing service is an organization of local brokerage firms who share listing information. There is no agency relationship involved.

The seller signed a 90-day listing agreement with a listing price of $200,000. The listing agent presented a full price cash offer one week later. The offer is set to expire in 48 hours. In this case: A.the seller can choose whether or not to accept the offer, but will owe the agent a commission regardless B.under the terms of a standard listing agreement, the seller cannot lawfully reject a full price offer C.the buyer cannot revoke the offer until 48 hours have passed D.if the seller rejects the offer, the buyer can sue him for breach of contract

A.the seller can choose whether or not to accept the offer, but will owe the agent a commission regardless Rejecting an offer that meets the terms set forth in the listing is likely to make the seller liable for the brokerage's commission. However, the rejection can't make the seller liable to the buyer who made the offer. The listing agreement is a contract between the seller and the brokerage; a prospective buyer is not a party to the agreement. The seller does not have a contract with any prospective buyer until the seller has accepted that buyer's offer.

Chin entered into an exclusive agency listing agreement with agent Juarez. Chin does not have to pay Juarez a commission if: A.Chin rejected a full-price offer B.Chin sold the property on his own to his best friend C.another agent found a buyer for the property D.a member of the MLS found a buyer for the property

B.Chin sold the property on his own to his best friend The exclusive agency listing allows the seller to contract for the services of a brokerage but retain the right to sell the property himself without obligation for a commission.

An owner has a fee simple defeasible title. She enters into a listing agreement with a real estate agent. Which of the following should be included in the agreement? A.A description of both the house and the car B.House and deed conditions C.All the furniture that is in the house D.Details about the house and the landscaping

B.House and deed conditions If a property is subject to a qualified fee (such as a fee simple defeasible), the listing should make note of what the particular conditions are for the owner to continue to hold title.

Theo takes an exclusive right to sell listing in early September, while working as a licensee for West Side Realty. In mid-October, he quits his job, surrenders his license, and moves out of state. What happens to Theo's listing? A.It is converted to an open listing B.It continues to be a valid exclusive listing with West Side Realty C.It will be reassigned to another brokerage firm in the same multiple listing service D.The agency relationship automatically terminates

B.It continues to be a valid exclusive listing with West Side Realty A listing belongs to a brokerage firm, not to an individual licensee. It is a contract between a seller and a firm, so it would remain in place even if the seller's particular agent left the firm.

A licensee locates what seems like a ready, willing, and able buyer. However, the deal falls through at closing because the buyer can't obtain necessary financing. At the same time, though, the seller turns out to be unable to provide marketable title. Does the seller still owe a commission to the listing agent in this case? A.No, because the sale didn't close B.No, because there was no ready, willing, and able buyer C.Yes, because the licensee saw the transaction through to the closing date D.Yes, because the seller has an absolute duty to provide marketable title at closing

B.No, because there was no ready, willing, and able buyer The most important rule in determining whether a seller is obligated to pay a commission is whether a ready, willing, and able buyer was found during the listing period. This would take precedence over the seller's failure to provide marketable title. A buyer who does not have the financial ability to complete the purchase does not qualify as "able."

After much persistence, real estate agent Zelda obtains an exclusive right to sell listing from the Quincys. This listing agreement is a contract between: A.Zelda and the listing firm B.Zelda's firm and the seller C.the firm, Zelda, and the seller D.Zelda and the seller

B.Zelda's firm and the seller Even though it is prepared by an individual licensee, a listing agreement is a contract between a brokerage firm and a seller. A licensee is only allowed to act as her firm's agent, and cannot enter into a contract with a seller.

An agent is ready to list a farm that was previously owned by a deceased woman with four adult children. Two of the children asked the agent to take the listing. Before taking the listing, the agent should: A.insist that all four children sign quitclaim deeds B.check the public records to see who owns the property C.have the two children sign a lien release D.examine the deceased woman's will

B.check the public records to see who owns the property The agent can check with the county recorder's office to determine who owns the property. The agent will want all owners of the property, not just the two children who contacted her, to sign the listing agreement.

To be entitled to a commission, a listing agent does not have to prove that she was the procuring cause of the sale if she has a/an: A.net listing B.exclusive right to sell listing C.all-inclusive listing D.open listing

B.exclusive right to sell listing With an exclusive right to sell listing, the real estate brokerage is guaranteed a commission if anyone sells the property during the listing period.

"The brokerage will provide the owner with a list of names of all persons with whom the brokerage or any other person negotiated concerning the above described property during the period of this listing no later than fourteen days subsequent to the termination date of this listing agreement. If the property is sold to any person named in the list prior to the relisting of the property, without the services of another brokerage, and within ninety days of the termination date of this contract, seller agrees to pay the brokerage a commission of 6.5 percent." This is an example of a/an: A.blue sky clause B.extender or broker protection clause C.option clause D.time is of the essence clause

B.extender or broker protection clause An extender clause (also known as a broker protection or safety clause) prevents a seller from delaying acceptance of a buyer's offer until the listing expires, in order to avoid paying a commission. The clause will usually require the listing brokerage to give the seller a list of potential buyers contacted during the listing period.

A firm obtains a listing from a seller that does not specify a commission rate. Instead, it explains that the brokerage is to receive as its commission all excess monies over and above the minimum sales price agreed upon by the brokerage firm and the seller. This type of listing is known as a/an: A.exclusive agency listing B.net listing C.non-exclusive listing D.exclusive right to sell listing

B.net listing With a net listing, the seller sets a net amount she is willing to accept for the property; if the selling price exceeds that amount, the brokerage firm keeps the excess as its commission.

A property was listed with Big Bucks Realty. An agent working for Integrity Realty finds a buyer who wants to make an offer. Instead of calling the agent at Big Bucks Realty, the agent contacts the seller directly to present the offer. The seller and Big Bucks Realty had probably entered into a/an: A.net listing B.open listing C.exclusive agency listing D.exclusive right to sell listing

B.open listing With exclusive listing agreements, the buyer's agent typically presents the offer to the listing agent. That is not the case with an open listing, however.

If a real estate agent receives a commission even if the sellers find the buyer, what type of listing agreement do they have? A.Open listing B.Exclusive agency listing C.Exclusive right to sell listing D.Net listing

C.Exclusive right to sell listing Under the terms of an exclusive right to sell listing, the agent is entitled to a commission regardless of who finds the buyer.

At closing, a sale doesn't go through because the seller's anticipated transfer to another city gets suddenly postponed, and the seller no longer wants to sell. Does the seller owe the listing agent a commission in this situation? A.No, because the sale didn't close B.No, because this was a circumstance outside the seller's control C.Yes, because the seller won't provide marketable title, which is considered a default D.Yes, unless the buyer and seller agreed to mutually cancel the transaction

C.Yes, because the seller won't provide marketable title, which is considered a default The listing agent has earned a commission if, after a suitable buyer agrees to buy, the sale fails to close and the seller is at fault. The seller's main responsibility regarding closing is to deposit into escrow a deed with marketable title. The seller failed to do that here.

A real estate agent enters into a listing agreement with the property owner. Under the terms of a typical listing agreement, the agent is not obligated to: A.market the property in a reasonable and customary manner B.use a reasonable effort (due diligence) to find a ready, willing, and able buyer C.prepare the deed and title for closing D.present all offers to the seller as soon as they're received

C.prepare the deed and title for closing Real estate agents are not responsible for preparing the deed that will transfer title to the buyer. In fact, this would likely constitute the unauthorized practice of law.

Gail gives ABC Realty a listing that stipulates it is the only real estate firm authorized to list her home. At the same time she insists on including a provision that would allow her to sell the home herself without paying a commission to ABC. Which of the following describes the kind of listing she has created? A.Non-exclusive listing B.Exclusive right to sell listing C.Exclusive open listing D.Exclusive agency listing

D.Exclusive agency listing An exclusive agency listing agreement entitles the brokerage to a commission if anyone other than the seller finds a buyer for the property during the listing's term.

A property seller and a real estate agent entered into a listing agreement. Even though the seller found the buyer, the agent still collected a commission. What kind of listing agreement did they have? A.Net listing B.Open listing C.Exclusive agency listing D.Exclusive right to sell listing

D.Exclusive right to sell listing Under an exclusive right to sell listing agreement, the real estate agent is entitled to a commission regardless of who finds the buyer.

Prices in a local market are trending downward. A seller found that she had to lower the price of her house by $25,000 over the course of six months before she could find a buyer. Upset over selling at a loss, she informs her listing agent that she is going to lower the commission rate that she pays. Can she do this? A.Yes, a loss by the seller must be shared by the listing agent B.Yes, since commission rates are negotiated and can be changed at any time C.No, commission rates are established by the local multiple listing service and cannot be changed D.No, the commission rate, once established in the listing agreement contract, cannot be changed unless both parties agree

D.No, the commission rate, once established in the listing agreement contract, cannot be changed unless both parties agree A change to the commission rate could be made by both parties, as the listing agreement is a contract that could be amended. However, once the contract exists, it is not something that can be changed unilaterally by one dissatisfied party.

Buyer Bob and Seller Sam decide to wait until Sam's listing agreement with XYZ Real Estate Agency has expired, to avoid paying a commission. Does the firm (and, by extension, the individual listing agent) have any legal recourse? A.Yes, the listing agent can pursue criminal charges B.Yes, the listing agent can sue Bob under the listing agreement C.Yes, the listing agent can sue Sam under the listing agreement D.No, the listing agent has no further recourse

D.No, the listing agent has no further recourse If a listing agreement does not include an extender clause (a safety clause), the listing agent has no recourse against a buyer and seller who avoid paying a commission by waiting to close until after the listing has expired. For this reason, most listing agreement forms have an extender clause. (Note: this question doesn't involve the license law, so it's a national question and not about Washington law or practice. While the question might be considered tricky, if you face a question like this on the state exam you should assume there is no extender clause since the question doesn't mention one.)

A real estate agent made a listing presentation to a property owner. The owner was impressed with the agent and signed a listing agreement. The owner told the agent that he was married, but his wife was in the hospital and could not sign the listing agreement. He asked the agent to proceed with the listing anyway, because they were in a hurry to sell the house. In these circumstances, the agent should: A.do as the seller asks; the agent can get the wife's signature later B.do as the seller asks, because dower rights give the husband the right to list the marital property C.refuse to take the listing, because the seller clearly has an ulterior motive for trying to sell the property while his wife is ill, and the agent should not get mixed up in a fraudulent transaction D.refuse to take the listing, but tell the seller that as soon as the wife signs the listing they can proceed with trying to find a buyer

D.refuse to take the listing, but tell the seller that as soon as the wife signs the listing they can proceed with trying to find a buyer All of the owners of a property should sign the listing agreement. Even if the spouse of an owner doesn't have any ownership interest, he or she should sign the listing to avoid any doubt as to the agent's authority.