Real Estate Principles and Practices Chapter 8 Listing the Property © 2014 OnCourse Learning

Real EstateReal Estate Principles and Practices Principles and Practices

Chapter 8Chapter 8

Listing the PropertyListing the Property

© 2014 OnCourse Learning


Key TermsKey Terms

Broker

CMA

Discount broker

Employee

Exclusive agency

Exclusive right to sell

Flat fee listing

Independent contractor

License

Listing contract

MLS

NAR

Net listing

Open listing

REALTOR®

Salesperson

Sherman Antitrust Act


OverviewOverview

Obligations of seller and broker

Types of listings

Commission structure

Employee v. independent contractor


Need for a ProfessionalNeed for a Professional

Owner may sell their own home

Determine value

Attract prospective buyers

Financially qualify buyers

Prorate expenses


Contract Between Broker and Contract Between Broker and SalespersonSalesperson

No minimum salary

Salesperson pays taxes

Sets own hours

Pays all expenses

Receives salary

Must withholdSocial security

Income tax

Unemployment tax

Can set hours

Can pay extras


Using TechnologyUsing Technology

Computer informationMLS, tax information, mortgage rates, maps

Computer software

Email

Cell phones

Voice Mail

PDA


Obtaining the ListingObtaining the Listing

Listings are the company’s merchandise

Comparable market analysis (CMA)Comparable market analysis (CMA)1. Square footage

2. Compare subject property to:

Recent sales

Active listings

3. Seller proceeds

4. Listing contract

5. Marketing


The Listing ContractThe Listing Contract

Listing contacListing contact: Seller’s price and terms, broker services and amount of commission

Signed by owners

Restrictions

Broker responsibility

Personal property

Fixtures

Seller costs



Basic information:

1. Description of the property

2. Amount of commission and when paid

3. Expiration date

4. Signature of parties charged


Exclusive Right to SellExclusive Right to Sell

Exclusive-right-to-sell: Exclusive-right-to-sell: Sole right to sell given to one firm

Broker receives commission regardless of who sells


Exclusive Right to Sell Listing Exclusive Right to Sell Listing ContractContract

Property DescriptionProperty Description

Figure 8.3

Amount of commissionAmount of commission

Expiration Expiration

Price and termsPrice and termsConditionsConditions

Earnest money divided between seller and brokerEarnest money divided between seller and broker


Exclusive Right to Sell Listing Exclusive Right to Sell Listing ContractContract

Figure 8.3

Signatures of ownersSignatures of owners

Title information / warranty deedTitle information / warranty deed

Promise to maintain propertyPromise to maintain property

Signature of agentSignature of agent

Lockbox / MLSLockbox / MLS



Exclusive AgencyExclusive AgencyOne broker

No commission owed if owner sells

Open ListingOpen ListingMultiple brokers

No commission owed if owner sells



Net ListingNet ListingSeller receives net amount

Broker receives any amount over the agreed net

100%100%- 7%- 7%

93% = .9393% = .93

$150,000 ÷ .93 = $150,000 ÷ .93 = $161,300 (rounded up)$161,300 (rounded up)



Flat Fee ListingFlat Fee ListingRange of services based upon the fee

Lower fee collected upfront

Seller charged for co-op

Discount BrokerDiscount BrokerFee less than prevailing rate

Same service – cost kept at minimum


Agent CompensationAgent Compensation

No set commission rate - negotiable

Antitrust Laws

Commission payment terms:

Broker produces a ready, willing and able buyer

Prove performance

Sale consummated

Fee is paid if seller terminates


Terminating Terminating

Mutual consentSeller breach – broker may sue for damages

Broker breach – owner may terminate

Death of either party

Economic change

Property destroyed

Listing prevails until sold or expiredListing prevails until sold or expired


Terminating Terminating

Expiration of time

Written termination dates

Automatic extensionsIllegal

Listing prevails until sold or expiredListing prevails until sold or expired


Multiple Listing ServicesMultiple Listing Services

Multiple lasting service (MLS): Multiple lasting service (MLS): Group of brokers who share listings

National Association of REALTORS®July 1, 1992 - Subagency is optional

Must offer cooperation and compensation

Computer access

Processing time limits


Antitrust LawAntitrust Law

Sherman Antitrust Act: Antitrust Act: fair trade

Price fixing prohibited

Market dictates the fee

Restraint of trade

Boycotting


Real Estate AssociationsReal Estate Associations

Voluntary organization of personas engaged in the real estate business

Promotes ethics

Protects property rights

Secures benefits for members

State and local associations



RegisteredRegistered



Specialize in property management coursesSpecialize in property management courses

Developed leadership Developed leadership training and relocation training and relocation

coursescourses

Organization of minority brokers Organization of minority brokers promoting improved housingpromoting improved housing

Documents

Real Estate Principles and Practices Chapter 8 Listing the Property © 2014 OnCourse Learning