Chapter 2: Listing Agreements Flashcards

Chapter 2: Listing Agreements Flashcards

Commission rateThe commission rate must be fully negotiable.There can be no "mandatory" or "standard" rate of compensation.Listing amendment formChanges to the terms of a signed listing agreement should generally be made on a special addendum form, especially if the changes are numerous or complicated.Open listingA seller may enter into open listing agreements with more than one real estate firm at the same time.In an open listing agreement, the seller agrees to pay the listing agent a commission only if the agent is the procuring cause of the sale.Real estate firms disfavor open listing agreements and many multiple listing associations prohibit them.Seller disclosure statementWashington law requires a seller of real property to give the buyer a completed seller disclosure statement.The seller must complete the disclosure form without the agent's help and give it to the buyer within five days after a purchase and sale agreement is signed.Modifying the agreementOnce a listing agreement has been signed, the terms of the agreement can be modified only with the written consent of both parties.Extender clauseAn extender clause provides that if the seller sells the property within a specified period after the expiration of the listing agreement to someone that the agent introduced to the property, the seller must pay the agent the commission.TerminationA listing agreement will terminate on its expiration date or when the sale of the property closes.It will also terminate if the brokerage goes out of business, or has its license suspended or revoked.The seller and the brokerage may mutually agree to terminate the listing, or one party may decide to terminate the agreement on his own.However, if one party terminates the listing agreement unilaterally, he may be liable for breach of contract.Definition of saleThe listing agreement defines a sale quite broadly to protect the real estate brokerage.A sale is defined as including a contract to sell, an exchange or contract to exchange, an option to purchase, or a lease with an option to purchase.Rescission rightsA buyer can rescind the purchase and sale agreement within three days after receiving the seller disclosure statement.A buyer who doesn't receive a disclosure statement can rescind the agreement any time before closing.If the buyer rescinds, he's entitled to a full refund of

the earnest money deposit.SignaturesAll of the property's owners should sign the listing agreement as sellers. If a seller is married, the seller's spouse should also sign.If the listing agreement is signed by an attorney in fact, the power of attorney must authorize

sale of the property, and it should be recorded.If the property is owned by an entity, the listing agreement must be signed by an authorized person, such as a corporate officer, a general partner, or a trustee.If the property is part of an estate, the agreement must be signed by the personal representative.Net listingIn a net listing arrangement, the seller designates the net amount he wishes to receive from the sale.If the property sells for more than the amount needed to achieve the

seller's net, the brokerage firm is entitled to keep the excess.Hold harmless clauseIn a listing agreement's hold harmless clause, the seller agrees to take responsibility for the information given to the