Chapter 20 ________________ The Principal-Broker Relationship: Employment

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Chapter 20________________The Principal-Broker Relationship: Employment

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Listing Agreement

An employment contract between the owner/seller and the real estate broker.

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1. Exclusive right to sell2. Exclusive agency3. Open listing4. Net listing

Listing Contract Types

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Exclusive Right to Sell

The listing broker is entitled to a commission no matter who sells the property during the listing period.

This is the most common type of listing.

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Exclusive agency

Similar to the exclusive right to sell except the owner may sell the property himself during the listing period and not owe a fee to the broker.

Broker may be less enthusiastic under this form of listing.

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Open listing

There are no exclusive rights. Whoever sells the property will earn the fee. Brokers are reluctant to develop a sales

effort.

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Net listing

Owner states the price he wants for the property and agrees to pay the broker anything above this amount as commission.

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Buyer Representation

Exclusive Authority to Purchase – an agreement where the broker works for the client, the buyer!

Primary responsibility is to the purchaser. Principal is now the Buyer. Buyer Agency!

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MLS A service among REALTOR® members to

offer compensation to other member brokers and increase the market exposure for the listed property.

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Broker Compensation Commission earned when agreed between

owner and broker. Usually occurs when a “ready, willing and

able buyer” is produced. Procuring cause is the one whose efforts

originated the procurement of the sale.

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Terminating the Agreement

Mutual agreement Abandonment

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Key Terms Advance fee listing Exclusive authority to

purchase Exclusive right to sell Multiple listing service

(MLS)

Net listing Ready, willing, and able

buyer Real estate listing