CHAP 7 TYPES OF REAL ESTATE
CONTRACTS STUDY GUIDE
COMPREHENSIVE DOCUMENT
1: Listing agreement
Listing agreements
-When Property owners hire a to real estate brokerage handle the sale of the property.
They sign a written contract that will govern their relationship in the transaction.
-This contract is the listing agreement. The listing agreement sets forth the rights and responsibilities of each
party to the contract.
-In listing broker may be an individual with a broker's license, but more often it's a
licensed real estate brokerage firm. We use the terms broker and brokerage somewhat
interchangeably. Broker is a common umbrella term covering all broker licensees, whether individuals or
firms.
-That usually a salesperson fills out the listing agreement form and signs it. However, this salesperson simply
acts on behalf of the brokerage : under state law, only a broker can make a contract for brokerage services.
-A listing agreement creates an agency relationship between the seller (the principal) and the brokerage (the
agent).
The agency relationship means that the brokerage and its salesperson must act in the seller's best interests.
Question
,A salesperson takes a listing and submits the information to the multiple listing service.
The property seller has a contract with the:
salesperson 's broker
Earning a commission
-In the listing agreement , the seller agrees to compensate the real estate brokerage for
its
services.
brokerage 's A compensation usually takes the form of a commission, which is sometimes called a
brokerage fee.
-The commission is usually a percentage of the purchase price.
For example, if a seller agreed to pay a 6% commission and the property sells for $200,000, the brokerage
earns 6% of $200,000, or $12,000.
Three Requirments
- The Broker will be legally entitled to collect the Commission only if the following requirements are
met.
,-1.The broker and the was seller had a written listing agreement .2 The broker licensed
at the time she performed brokerage services for the seller 3. The broker met the terms
of the listing agreement.
-Of Course the seller may choose to pay the brokers commission even when there's no legal obligation to do
so as long as the broker was properly licensed
-But if the seller Refuses to pay, then the broker can sue only if all three of these requirements have been
fulfilled.
Question
The payment of a commission to a based real estate broker only on an oral listing is:
permissible if the seller elects to do so
Ready,willing, and able buyer
-Let's take a closer look at the third requirement.
To be entitled to a commission, the broker must have met the terms of the listing
agreement.
According to the terms of most seller listing agreements , the must pay the firm's
commission only if a ready, willing, buyer and able for the property is
found during the listing period.
Question
What essential element is necessary between broker and principal in a transaction involving real property?
There must be a written contract of employment
, -How do we determine if a buyer is "ready and willing"?
In the listing agreement, the seller states a price and other terms of sale that would be acceptable (such as a
particular closing date or the removal of certain fixtures).
If someone offers to buy the property on those terms, that buyer meets the ready and willing requirement.
Question
If a property owner refuses to pay a broker a properly earned commission, the broker may seek relief by:
filing a court action for damages against the seller
Legally and financially able
-In addition to being ready and willing agreeing to the sellers terms or making another acceptable offer, the
buyer must be able.An able buyer is one who is the capacity to enter into a binding contract and the financial
resources necessary to complete the purchase.
-The buyers resources are considered adequate if they have sufficient cash on hand to pay the agreed price,
or if they are eligible for a loan.
-Since the obligation to pay the commission arises when a ready, willing, and able buyer is found, if the seller
refuses a full price offer from such a buyer , she still owes the commission .
And if the seller does accept the offer, and the deal falls through due to some failure of the seller , she still
owes the commission (though the brokerage may choose not to pursue the matter).
-For example, suppose the broker finds a ready, willing, and able buyer, but then the seller simply changes his
mind about selling the property.
The seller still owes a commission.
Question
seller
CONTRACTS STUDY GUIDE
COMPREHENSIVE DOCUMENT
1: Listing agreement
Listing agreements
-When Property owners hire a to real estate brokerage handle the sale of the property.
They sign a written contract that will govern their relationship in the transaction.
-This contract is the listing agreement. The listing agreement sets forth the rights and responsibilities of each
party to the contract.
-In listing broker may be an individual with a broker's license, but more often it's a
licensed real estate brokerage firm. We use the terms broker and brokerage somewhat
interchangeably. Broker is a common umbrella term covering all broker licensees, whether individuals or
firms.
-That usually a salesperson fills out the listing agreement form and signs it. However, this salesperson simply
acts on behalf of the brokerage : under state law, only a broker can make a contract for brokerage services.
-A listing agreement creates an agency relationship between the seller (the principal) and the brokerage (the
agent).
The agency relationship means that the brokerage and its salesperson must act in the seller's best interests.
Question
,A salesperson takes a listing and submits the information to the multiple listing service.
The property seller has a contract with the:
salesperson 's broker
Earning a commission
-In the listing agreement , the seller agrees to compensate the real estate brokerage for
its
services.
brokerage 's A compensation usually takes the form of a commission, which is sometimes called a
brokerage fee.
-The commission is usually a percentage of the purchase price.
For example, if a seller agreed to pay a 6% commission and the property sells for $200,000, the brokerage
earns 6% of $200,000, or $12,000.
Three Requirments
- The Broker will be legally entitled to collect the Commission only if the following requirements are
met.
,-1.The broker and the was seller had a written listing agreement .2 The broker licensed
at the time she performed brokerage services for the seller 3. The broker met the terms
of the listing agreement.
-Of Course the seller may choose to pay the brokers commission even when there's no legal obligation to do
so as long as the broker was properly licensed
-But if the seller Refuses to pay, then the broker can sue only if all three of these requirements have been
fulfilled.
Question
The payment of a commission to a based real estate broker only on an oral listing is:
permissible if the seller elects to do so
Ready,willing, and able buyer
-Let's take a closer look at the third requirement.
To be entitled to a commission, the broker must have met the terms of the listing
agreement.
According to the terms of most seller listing agreements , the must pay the firm's
commission only if a ready, willing, buyer and able for the property is
found during the listing period.
Question
What essential element is necessary between broker and principal in a transaction involving real property?
There must be a written contract of employment
, -How do we determine if a buyer is "ready and willing"?
In the listing agreement, the seller states a price and other terms of sale that would be acceptable (such as a
particular closing date or the removal of certain fixtures).
If someone offers to buy the property on those terms, that buyer meets the ready and willing requirement.
Question
If a property owner refuses to pay a broker a properly earned commission, the broker may seek relief by:
filing a court action for damages against the seller
Legally and financially able
-In addition to being ready and willing agreeing to the sellers terms or making another acceptable offer, the
buyer must be able.An able buyer is one who is the capacity to enter into a binding contract and the financial
resources necessary to complete the purchase.
-The buyers resources are considered adequate if they have sufficient cash on hand to pay the agreed price,
or if they are eligible for a loan.
-Since the obligation to pay the commission arises when a ready, willing, and able buyer is found, if the seller
refuses a full price offer from such a buyer , she still owes the commission .
And if the seller does accept the offer, and the deal falls through due to some failure of the seller , she still
owes the commission (though the brokerage may choose not to pursue the matter).
-For example, suppose the broker finds a ready, willing, and able buyer, but then the seller simply changes his
mind about selling the property.
The seller still owes a commission.
Question
seller
