Real Estate Principles Tenth Edition Real Estate: An Introduction to the Profession Tenth Edition

Chapter 20 The Principal-Broker Relationship: Employment __________________________________

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

1. Exclusive right to sell 2. Exclusive agency 3. Open listing 4. Net listing Listing Contract Types

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.

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.

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

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

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!

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

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.

Terminating the Agreement Mutual agreement Abandonment

Key Terms Advance fee listing Broker Exclusive authority to purchase Exclusive right to sell Multiple listing service (MLS) Net listing Ready, willing, and able buyer Real estate listing