© OnCourse Learning Chapter 20 : The Principal-Broker Relationship: Employment

 An employment contract between the owner/seller and the real estate broker. LISTING AGREEMENT © OnCourse Learning

 An agreed amount of compensation the owner agrees to pay the broker.  Not set by law.  The amount of the fee is negotiable between the owner and the broker.  Typical commission fee in the US is 5% to 7% of the selling price. © OnCourse Learning BROKERAGE COMMISSION

1. Exclusive right to sell 2. Exclusive agency 3. Open listing 4. Net listing LISTING CONTRACT TYPES © OnCourse Learning

 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. EXCLUSIVE RIGHT TO SELL © OnCourse Learning

 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. EXCLUSIVE AGENCY © OnCourse Learning

 There are no exclusive rights.  Whoever sells the property will earn the fee.  Brokers are reluctant to develop a sales effort. OPEN LISTING © OnCourse Learning

 Owner states the price he wants for the property and agrees to pay the broker anything above this amount as commission. NET LISTING © OnCourse Learning

 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! BUYER REPRESENTATION © OnCourse Learning

EXCLUSIVE AUTHORITY TO PURCHASE

© OnCourse Learning EXCLUSIVE AUTHORITY TO PURCHASE (continued)

 A service among REALTOR ® members to offer compensation to other member brokers and increase the market exposure for the listed property. MLS © OnCourse Learning

 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. BROKER COMPENSATION © OnCourse Learning

 the one whose efforts originated procurement of the sale. © OnCourse Learning PROCURING CAUSE

 Mutual agreement  Abandonment TERMINATING THE AGREEMENT © OnCourse Learning

 FLAT-FEE BROKERS  DISCOUNT BROKER  VARIABLE RATE COMMISSIONS © OnCourse Learning BARGAIN BROKERS

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 © OnCourse Learning