LESSON 8: Listing Agreements
The listing agreement provides that if the seller sells the property within six months after the agreement expires to anyone who first learned of the property through the brokerage, the seller will be required to pay the brokerage's commission. This type of provision is called: a. an extender clause or safety clause b. a warranty clause or option provision c. an automatic renewal clause or holdover clause d. a habendum clause or hold harmless clause
An extender or safety clause guarantees a brokerage a commission if a buyer who learned of the property through the brokerage buys the property AFTER the listing period is over.
A listing agreement is not an enforceable contract unless it contains: a. the street address of the property b. a description of the property that is adequate to identify it c. the complete legal description of the property d. the property description photocopied from the seller's deed
A description of the property that is adequate to identify it Good idea to have street address, complete legal description, and photocopying, but these are not legal requirements
Many listing agreement forms provide that if the seller signs a purchase and sale agreement during the listing period: a. the listing is terminated immediately b. the buyer will pay half the brokerage's commission c. the brokerage will accept half the earnest money in lieu of the agreed commission d. the listing period is extended to the date set for closing the transaction
The listing period is extended to the date set for closing the transaction a clause extending the listing period until the closing date guarantees the brokerage a commission even if the closing date occurs after the end of the original listing period
When a buyer makes an offer on terms other than those set forth in the listing agreement: a. the agent should refuse to present it to the seller b. the seller is liable for the agent's commission whether he accepts the offer or not c. the seller can accept the offer without becoming liable for the agent's commission d. the seller can turn down the offer without becoming liable for the agent's commission
The seller can turn down the offer without becoming liable for the agent's commission a buyer who makes an offer that does not meet the seller's terms is not "ready and willing" = seller is not liable for agent's commission
When a transaction fails to close, the brokerage is legally entitled to the commission: a. unless the seller and buyer mutually agreed to terminate the transaction b. only if the buyer was the procuring cause c. if the failure to close was the seller's fault d. all of the above
if the failure to close was the seller's fault - change of heart - didn't have marketable title - unable to deliver possession to buyer - buyer/seller mutually backed out
After persuading the sellers to list their home, the broker fills out a listing agreement form. This listing agreement is a contract between seller and the: a. listing brokerage b. broker c. designated broker and the broker d. buyer
listing brokerage A listing agreement is a contract between a brokerage and a seller
The commission a brokerage will charge a seller is determined by: a. the state real estate board b. MLS policy c. negotiation between the brokerage and the property owner d. state law
negotiation between brokerage and property owner
An open listing is also called a/an: a. exclusive agency listing b. multiple listing c. non-exclusive listing d. net listing
non-exclusive listing bc a seller may give an open listing to more than one brokerage
Open listings are: a. generally used only when an agent is unwilling to execute a net listing agreement b. illegal in WA c. standard for residential property in WA d. generally used only when a seller is unwilling to execute an exclusive listing agreement
Generally used only when a seller is unwilling to execute an exclusive agreement net listings are illegal in WA agents prefer exclusive listing agreements
The type of listing agreement that will not state a fixed commission rate is the: a. open listing b. exclusive listing c. non-exclusive listing d. net listing
Net a net listing does not fix compensation as either a commission rate or a set dollar amount. discouraged in WA
Listings that do not fix the brokerage's commission at a certain rate, but allow the brokerage to keep any excess above a set amount, are known as: a. net listings b. open listings c. due diligence d. MLS
Net listings A net listing does not fix compensation at a set rate and therefore is open to abuse by bad agents
A seller authorizes an agent to actually sell the property (that is to enter into a binding contract with a buyer) under the terms of a typical: A) Exclusive right to sell listing agreement B) open listing agreement C) net listing agreement D) None of above
None of above in order for an agent to be able to enter into a contract with a buyer, the seller must execute a power of attorney, making the agent her attorney in fact
Under an open listing agreement, the seller is obligated to pay the brokerage a commission: a. only if the brokerage was the procuring cause of the sale b. whether or not a ready, willing, and able buyer is found during the listing period c. unless the agreement has entered the extension period d. no matter who found the buyer
Only if the brokerage was the procuring cause of the sale OPEN listing agreements have to have procuring cause to get commission
With an exclusive agency listing, the seller: a. only lists the property with one brokerage, but retains the right to sell the property by herself without being obligated to pay a commission b .can list the property with several brokerages, but only one of the firms is considered the seller's agent c. is only allowed to list the property with the procuring cause of the sale d. can list the property with several brokerages, but is only obligated to pay a commission for the procuring cause
Only lists the property with one brokerage, but RETAINS the right to sell the property BY HERSELF without being obligated to pay a commission
A brokerage's commission is usually a: a. percentage of the property's listing pice b. percentage of the property's appraised value c. percentage of the property's sales priec d. flat fee based on the anticipated difficulty of selling the property
Percentage of the property's sale price
If a seller accepts a buyers offer, as a general rule the seller is: a. required to pay the brokerage's commission whether or not the offer matched the terms set forth in the listing agreement b. only required to pay the brokerage's commission if the offer did not match the terms set forth in the listing agreement c. only required to pay the brokerage's commission if the offer matched the terms set forth in the listing agreement d. not required to pay the brokerage's commission, whether or not the offer matched the terms set forth in the listing agreement
Required to pay the brokerage's commission whether or not the offer matched the terms set forth in the listing agreement
If a brokerage submits an exclusive listing to a multiple listing service: a. the MLS is entitled to 50% of any commission earned on the listing b. the listing brokerage will share the commission if a cooperating broker from the MLS is the procuring cause of the sale c. all cooperating agents from the MLS represent the seller d. all of the above
The listing brokerage will share the commission if a cooperating broker from MLS is the procuring cause of sale
An exclusive listing agreement should always include: a. a description of the procuring cause b. a net listing provision c. a termination date d. a time is of the essence clause
A termination date Termination dates are not 100% necessary in WA, but on the national portion of the exam it is essential
A brokerage cannot successfully sue a seller for a commission unless: a. they had a written listing agreement b. the brokerage and its agent(s) were properly licensed before services were provided or a promise of compensation was procured c. the brokerage has fulfilled the terms of the listing agreeent d. all of the above
All of the above
A married couple is listing their house for sale, and a broker is preparing the listing agreement. The agreement should be signed by: a. the designated broker, the broker, and either one of the sellers b. either one of the sellers, and the broker on behalf of the brokerage c. both of the sellers and the buyer d. both of the sellers, and the broker on behalf of the brokerage
Both of the sellers, and the broker on behalf of the brokerage All owners should sign
A seller signs an open listing agreement with brokerage A, and then immediately signs another open listing agreement with brokerage B. if the property is sold before either listing expires, and brokerage B is the procuring cause of the sale: a. the seller is required to pay the full commission to both brokerages b. brokerage A will not be compensated for its efforts c. brokerage A and brokerage B will each receive half of the agreed commission d. brokerage A can sue the seller for breach of contract
Brokerage A will not be compensated for its efforts Open listing = ONLY the brokerage with PROCURING CAUSE of the sale receives a commission
A homeowner sells his own property, but is still required to pay a real estate commission. what kind of listing did the homeowner sign? a. net b. exclusive right to sell c. exclusive agency d. open
Exclusive right to sell exclusive right to sell = RE firm is guaranteed a commission if ANYONE sells the property
A buyer makes an offer that matches the sellers terms set forth in the listing agreement, but the seller decides not to accept the offer at all. Under the terms of most listing agreements, the brokerage is: a. entitled to keep the earnest money deposit b. required to refund the commission to the seller c. entitled to the commission anyway d. not entitled to any payment
Entitled to the commission anyway If a "ready willing and able" buyer is found but the seller backs out, the seller still owes the brokerge the commission
The owners of a house want to sell it, and they recognize the value of using an agent who is committed to getting their house sold. But they want to avoid paying a commission if they are able to find a buyer on their own. What type of listing should they sign?
Exclusive agency
Under an exclusive right to sell listing, the brokerage is entitled to a commission: a. whether or not the property sells during the listing term b. if the property sells during the listing term, regardless of who finds the buyer c. only if the brokerage is the procuring cause of the sale d. unless the seller finds a buyer without the brokerage's help
If the property sells during the listing term, regardless of who finds the buyer EXCLUSIVE RIGHT TO SELL = broker is entitled to commission NO MATTER WHO SELLS
A buyer is considered ready and willing if she: a. makes an offer that meets the seller's stated terms b. makes any reasonable offer to purchase c. offers to pay at least the appraised value of the property d. makes an earnest money deposit
Makes an offer that meets seller's stated terms
A brokerage cannot prevail in a lawsuit against a seller for a commission unless certain requirements have been met, these requirements include all the following except: a. the terms of the listing agreement were fulfilled b. the listing agreement was in writing c. the brokerage submitted the listing to a MLS d. the brokerage and the agent were properly licensed
The brokerage submitted the listing to a MLS. There is no requirement that a listing has to be submitted to the MLS
A ready and willing buyer is considered able only if she has: a. enough cash to buy the property on the agreed terms b. the capacity to contract and the financial ability to complete the purchase c. obtained a firm loan commitment from a mortgage broker or institutional lender d. prequalified for a loan from a reputable institutional lender
The capacity to contract and the financial ability to complete the purchase.
A property owner gave an open listing to each of six different brokerages. Which of the following statements is correct? a. whichever firm sells the property will share the commission equally with the other firms b. the firm that sells the property will earn the entire commission c. the owner can't legally give ore than one listing for her property d. the seller could be liable for as many as six different commissions
The firm that sells the property will earn the entire commission. OPEN = procuring cause
The circumstances under which the seller will be required to pay the brokerage a commission are determined by: a. MLS rules b. the terms of the listing agreement c. the terms of the purchase and sale agreement d. the DOL
The terms of the listing agreement
