Questions and Answers
What is an open listing?
What does an exclusive agency listing agreement entail?
The seller pays a commission if anyone other than the seller finds the buyer.
In an exclusive right to sell listing, the seller pays a commission regardless of who finds the buyer.
True
What are the four requirements for a valid listing agreement?
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What happens in a net listing?
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A listing agreement will terminate if the property is sold.
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How broadly is a sale defined in a listing agreement?
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The commission rate in a listing agreement can be mandatory.
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What does an extender clause do?
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What is the purpose of a hold harmless clause in a listing agreement?
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All property owners must sign the listing agreement as sellers.
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What is included in MLS listing agreement forms?
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Multiple listing services permit changes to the MLS listing agreement form.
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Study Notes
Listing Agreements Overview
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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.
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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.
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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
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Valid Listing Agreement:
- Must include a property description, promise of compensation, specify compensation amount, and be in writing with the seller's signature.
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Net Listing:
- Seller specifies a net amount desired from the sale.
- Brokerage retains any amount above the seller's specified net.
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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
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Definition of Sale:
- Broad definition includes contracts to sell, exchanges, options to purchase, or leases with purchase options to secure brokerage interests.
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Commission Rate:
- Fully negotiable, with no mandated or standard rates enforced.
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Extender Clause:
- Ensures the agent receives a commission if the seller sells to an introduced buyer within a specified timeframe after agreement expiration.
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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
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Seller Disclosure Statement:
- Mandatory in Washington for residential sales, with sellers required to furnish a disclosure statement to agents for buyer distribution.
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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.
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Input Sheet:
- Part of MLS listing agreement that allows agents to detail property features through checkboxes and codes for efficient MLS database entry.
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Modifications to Form:
- Generally, MLS does not permit alterations to listing agreement forms; exceptions may occur under specific conditions.
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Description
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.
