Written employment contract between broker/seller (NOT salesperson, though he signs on behalf of broker); fiduciary relationship
Who has authority in a a listing agreement? Seller or broker?
Broker can't accept offers, transfer property. (ONLY Seller can do that) -- Exception - Power of attorney
Compensation in a listing agreement
"Brokerage fee" = % of sale price,
1. Written agreement
2. Licensed (at time of rendered services)
3. Satisfaction of agreement terms
ii. Seller refusal to pay? - Can only sue; broker can't self help!
How to "earn a commission"
Broker must provide ready, willing, able buyer, w/n listing period.
What is an "Acceptable Offer?"
Offer meets seller terms, broker entitled to commission (regardless of sale)
What is an "Unacceptable Offer?"
Offer doesn't meet seller terms = no commission, unless accepted.
What is an "Able Buyer?"
Ready/willing buyer = capacity and financial ability to complete purchase
When is broker entitled to commission without closing?
If seller's fault = commission; if offer accepted and sale fails, seller STILL obligated, provided failure is due to one of the following:
1. Change of heart (Seller backs out)
2. No marketable title
3. Failure to deliver possession (Seller can't deliver possession)
4. Termination of agreement (Seller/buyer mutual agree to terminate)
Types of listing agreements (3)
Open listing, exclusive agency listing, and exclusive right to sell.
What is an "open listing?"
Commission ONLY IF broker was procuring cause of sale.
1. Procuring Cause (Reqm'ts): Broker/agent personally negotiated offer with ready, willing, able buyer and communicated the offer.
2. Non-Exclusive (can be given to other brokers; procuring cause = commission)
3. List of Prospects (broker tracks people contacted re: sale; evidence of procuring cause)
Exclusive agency listing
Commission if anyone other than seller sells property (seller can still sell, but commission goes to broker if anyone else sells property)
Exclusive right to sell listing
Commission if ANYONE sells (even owner)
1. Broker preferred (most protection)
Exclusive vs. Open listings
Exclusive vs. Open Listings: Open = Unilateral; Exclusive = Bilateral. (B/c open is one sided, ONLY seller must sign)
Four (4) requirements of a listing agreement
a. Written and signed by seller(s): ALL sellers must sign; salesperson can sign on broker's behalf
b. Property description: ANY adequate description (full/legal description advisable, not required)
c. Promise to compensate broker
d. Fixed compensation: Usually % of sale; negotiated/fixed by seller & broker;
i. "Net" Listing: Not enforceable in WA; broker given $ above a net amount set in agreement
e. Other elements: Broker authority (hold buyer money deposit on seller behalf; Termination date (required in ALL exclusives, NOT in open. Law doesn't set max/min.)
Terms of sale
Listing price most important!!! Seller responsible for setting price.
If property is subject to a qualified fee (such as fee simple defeasible), should that be annotated in the listing agreement?
ABSOLUTELY, YES! The listing should make note of the particular conditions which may be present.
What is an "extender" or "safety clause" and why would it be included in a listing agreement?
These clauses prevent a seller from delaying acceptance of a buyer's offer until the listing expires (to avoid commission). These types of clauses usually require the broker to provide a list of potential buyers contacted during the listing period.