Real Estate Listing Agreements & Brokerage Basics

• Listing Agreements
  • Limited service agreement: A broker agrees to perform specific tasks in a transaction.
  • Open listing: Primarily represents buyers, focused on online real estate brokerage.
  • Exclusive agency listing: Commission paid to the listing broker.
  • Exclusive right to sell listing: The seller cannot list the property with another brokerage and must pay commission even if they find a buyer.
  • FSBO (For Sale By Owner) commission agreement & agency disclosure: Applies when the buyer has representation, but the seller does not.

Brokerage

• State law requires affiliation with a brokerage to legally act as an agent.
• Training: Includes sales/compliance training post-licensing, and continuing education (CE) of at least 18 hours every 2 years for re-licensing.
• Support: Brokers should provide support to agents as needed.
• Compensation: Focus on training and support initially as compensation occurs after a transaction closes.
• Franchise: National/global presence offers benefits like commission split; involves franchise fees.
• Independent brokerage: No franchise fees but lacks franchise benefits.
• Fees: Determine who is responsible for fees and what monthly brokerage fees cover.
• Experience requirements: Some brokerages require a certain number of years licensed and transactions completed before affiliation.
• Specialty brokerage: Focuses on representing buyers, luxury real estate, or limited agency (prohibited even with full disclosure and consent).
• Policies & Procedures: Includes building access, dress code, and operational policies.
• Checks: Verify brokerage reputation through the Chamber of Commerce, Better Business Bureau, Zillow, Realtor.com, and Yelp.
• Errors & Omissions (E&O) Insurance: Covers agent mistakes; brokers must carry E&O insurance for all agents but does not cover fraud.

Agency Basics

• Parties
  • Principal/Client: Buyer, seller, lessor/lessee who hires an agent for representation.
    • Fully disclosed: Agent and all parties know the principal's identity.
    • Partially disclosed: Agent knows the principal's identity, but other parties do not.
    • Undisclosed: Identity not disclosed to the agent or other parties.
  • Customer: A third party or non-represented consumer.
  • Principal Broker (Utah): Only person authorized to enter into an agency relationship with the public. They hire and supervise subagents and reviews closing documents.
  • Competing broker: Directly helps clients with real estate needs alongside their own agents.
  • Non-competing broker: Only serves agents in their office.
  • Agent: Principal broker. Can hire other agents to represent clients.
  • Designated agency: Listing (representing seller) or buyer's agent.
• Types of Agency
  • All agency relationships are between the Principal and Broker: buyer broker, exclusive right to sell, limited agency consent.
  • Implied agency by conduct: Giving advice, guidance, counsel.
  • Express agency by contract: In writing.
  • Specific: Hired for a specific task like listing or buying.
  • General: Hired to do many things, like property management.
  • Universal: Hired to do all things.
  • Disclosure of Agency: Buyers and sellers need to know who represents whom.
  • Power of Attorney/Attorney in Fact: Authority to act on someone else’s behalf.
    • Specific: for FHA/VA loan clients, active military, use lender-provided document.
    • General: Covers medical, financial affairs, managing assets.
  • Subagency: Relationship between listing broker and buyer's broker.
    • Subagents: Agents hired by principal/branch broker to assist in representing clients.
  • Designated Agency (Utah): Branch broker can hire agents to represent clients.
  • Limited/Dual Agency: Agent/brokerage represents both buyer and seller.
    • Adena Realty Lawsuit: Occurred due to failure to disclose limited agency, and what the principle losses.

Property & Land

• Real Property/Estate/Land Includes:
  • Improvements: Anything built on the property like a house, shed, or landscaping.
  • Fixtures: Attached/fastened to the property (cabinets, furnace, curtain rods).
  • Appurtenance: Separate but comes with property and adds value (water well, easements).
• Property/Estate/Land Does NOT Include:
  • Emblements: Can be removed from the property (crops, fruits). Severance turns them into personal property.
  • Personal Property/Chattel/Personalty: Not attached to the structure (lawn mowers, cars, furniture).
• Ownership
  • Affixed: Surface rights; subsurface/mineral/water rights below; airspace rights above.
  • Annexation: Personal property becomes real property.
  • Two owners are possible, one owning surface rights (house) and another subsurface rights (minerals, oil, water).
  • Legal tests: Method of annexation, adaptability, relationship of parties.
• Easements
  • A right to cross someone’s property to access something.
  • Created in writing with a deed through a title company and recorded against the property.
  • Express: In writing (deed, will).
  • Implied: By prescription or use.
  • Implied to express: Court-ordered easement (created by necessity or condemnation).
  • Appurtenant easement: Attached to and runs with the property; stays in place throughout owners.
  • Easement in gross: Given to a specific person (hunters/fishers).
  • Party wall easement: Subdivisions share a common wall, own half of the improvement.
  • Easement by necessity: Needed for sewer lines, power, fire hydrants, or to prevent landlock.
  • Easement by condemnation: Eminent domain for the benefit of the community, imposed against will.
  • Commercial easements: For utilities (overhead lines, roads, drainage).
  • Easement by Prescription: The implied- through heavy use.
  • Ingress: Into the property.
  • Egress: Out of the property.
  • Termination: When no longer needed, used, or released by the party that uses it.
  • Dominant tenement/estate: Use of easement.
  • Servient tenement/estate: Grants benefit to the dominant estate.
• Water
  • Utah is the 2nd driest state.
  • Water Rights: Real property conveyed through a deed by the state engineer's office.
  • Water Shares: Personal property conveyed through a stock share certificate.
  • Riparian rights: Ownership goes to the middle of rivers, streams, and non-navigable waters.
  • Littoral rights: Relate to lakes, oceans, and large bodies of water.
  • Accretion: Adding land from soil accumulation of natural causes.
  • Losing water: Must find beneficial use in 3 years, or the state reclaims it. 5 years = abandonment
  • REPC 1.4: All water put to use conveys with property. Anything not to be conveyed must be explicitly excluded.
  • State Engineer: Controls all water and governs water rights ownership.
  • Avulsion: Big loss through a major natural event.
  • Erosion: Gradual loss of soil through natural causes. Boundary lines remain the same.
  • Doctrine of Prior Appropriation (1903): Water rights owned by the state of Utah; first in use appropriated.
  • Acre foot of water: 1-acre covered with 1-foot depth of water; 43,560 cubic feet of water.
  • Utah Division of Water Rights: Administers distribution of state water resources.

Characteristics of Real Property

• Economic (affect value)
  • Scarcity: Available land is scarce.
  • Improvements: Increasing value.
  • Permanence of Investment: Long-term, stable investment.
  • Situs: Area preference/location.
• Physical
  • Immobility: Cannot move the ground.
  • Indestructibility: Cannot destroy the land.
  • Uniqueness: Qualities of the land.

Legal Descriptions of Real Property

• Metes & Bounds:
  • Oldest US method to describe property regardless of shape/size using degrees, minutes, seconds, and length of calls. Includes a point of closure.
  • Found in the description clause of a deed and usually for rural properties.
• Government Survey: Rectangular coordinate/grid system with townships (6x6 miles) and ranges (6x6 miles); uses Salt Lake base and meridian in Utah
  • Section = 1 mile squared (640 acres).
  • Quadrant, corner, quarter, and tie leg designate section corner.
  • Front footage: Distance across the front of the property.
  • Principle meridian: Runs north to south.
• Lot & Block/Subdivision/City Survey:
  • No points of beginnings or measurements, example: lot 1 block 1 plot A.
  • Subdivision = lots in a plat (a titled map drawn by an engineer).

Zoning

• A - Agricultural: Hay fields, farms, barns, animals.
• R - Residential: Single & multi-family housing, apartments.
• C - Commercial: Office buildings, fast food, convenience markets, strip centers.
• M - Manufacturing/Industrial: Large facilities for production and transportation.
• S - Special Purposes: Churches, hospitals, government buildings.
• Zoning Ordinances: Regulations/laws that define how property in specific zones are used.
• Zoning District: A large area zoned for a specific use.
• Variances: Use doesn’t meet zoning requirements but makes sense for the area.
• Legal Nonconforming Use: Property used as previously zoned until transferred to a new owner.
• Conditional Use Permits: One-time temporary exception for a use not otherwise permitted.
• Non-Conforming Permit: Changes in zoning regulations cause use of property no longer being permitted.
• Re-Zone: Assign a different category of restrictions, use, development.
• Building Codes: Regulations governing design, construction, and maintenance of structures. Building Code Variance: Permission to use a building for a purpose other than code.
• CO Certificate of Occupancy: Issued by the city after meeting codes.
• Urban Renewal: Redevelopment districts revitalizing urban areas.
• Cluster Zoning: Allows violations of setbacks between units to allow greater common areas.
• Demographics: Zip code average income, education, and employment levels.
• Private Land: Contact the county assessor's office to confirm.
• Encroachment: Intrusions on a person's property.

Police Power

• The government's power to regulate behavior and enforce order within its territory.
• Licensing: Real estate license granted by the state.
• Emergency: Allows emergency personnel and equipment to act without permission.
• Zoning: Use impacts the value of property and is granted to the city by the state.
• Condemnation: Government takes property for public use with compensation.
• Inverse Condemnation: Owner wants the state to take the rest of the property for compensation because it's devalued.
• Eminent Domain: Local, state, or federal government takes private property for public use and compensates the owner.
• Escheat: Reversion of property to the state when the person dies intestate, lacking claimants or heirs.