Real Estate Listing Agreements Overview

Listing Agreements Overview

• Open Listing:

  • Seller can have multiple real estate firms working simultaneously.
  • Commission owed only if the agent is the procuring cause of the sale.
  • Generally disfavored by real estate firms and often prohibited by multiple listing associations.

• Exclusive Agency Listing:

  • Seller pays commission only if a buyer is found by someone other than the seller.
  • Commission not owed if the seller finds the buyer independently without agent help.

• Exclusive Right to Sell Listing:

  • Seller pays commission regardless of who finds the buyer.
  • This agreement is common in residential transactions, ensuring the agent is compensated for their efforts.

Legal Aspects of Listing Agreements

• Valid Listing Agreement:

  • Must include a property description, promise of compensation, specify compensation amount, and be in writing with the seller's signature.

• Net Listing:

  • Seller specifies a net amount desired from the sale.
  • Brokerage retains any amount above the seller's specified net.

• Termination of Agreement:

  • Terminates on expiration date, closing of sale, or if the brokerage license is suspended or revoked.
  • Mutual termination is possible; unilateral termination may lead to breach of contract liability.

Definitions and Clauses

• Definition of Sale:

  • Broad definition includes contracts to sell, exchanges, options to purchase, or leases with purchase options to secure brokerage interests.

• Commission Rate:

  • Fully negotiable, with no mandated or standard rates enforced.

• Extender Clause:

  • Ensures the agent receives a commission if the seller sells to an introduced buyer within a specified timeframe after agreement expiration.

• Hold Harmless Clause:

  • Seller takes responsibility for the accuracy of information provided to the agent, agreeing to cover legal expenses incurred by the brokerage due to seller misinformation.

Additional Requirements

• Seller Disclosure Statement:

  • Mandatory in Washington for residential sales, with sellers required to furnish a disclosure statement to agents for buyer distribution.

• Signatures:

  • All property owners must sign the listing; spouses and authorized individuals (like corporate officers) must also sign if applicable.
  • For estates, the personal representative must sign.

• Input Sheet:

  • Part of MLS listing agreement that allows agents to detail property features through checkboxes and codes for efficient MLS database entry.

• Modifications to Form:

  • Generally, MLS does not permit alterations to listing agreement forms; exceptions may occur under specific conditions.

This quiz covers the key types of real estate listing agreements, including Open, Exclusive Agency, and Exclusive Right to Sell listings. It also addresses the legal aspects required for a valid listing agreement. Test your knowledge on how these agreements work and their implications for sellers and agents.