Real Estate Principles and Practices Chapter 8 Listing the Property © 2014 OnCourse Learning

Key Terms Broker CMA Discount broker Employee Exclusive agency Exclusive right to sell Flat fee listing Independent contractor License Listing contract MLS NAR Net listing Open listing REALTOR® Salesperson Sherman Antitrust Act

© 2014 OnCourse Learning Overview Obligations of seller and broker Types of listings Commission structure Employee v. independent contractor

© 2014 OnCourse Learning Need for a Professional Owner may sell their own home Determine value Attract prospective buyers Financially qualify buyers Prorate expenses

© 2014 OnCourse Learning Contract Between Broker and Salesperson No minimum salary Salesperson pays taxes Sets own hours Pays all expenses Receives salary Must withhold Social security Income tax Unemployment tax Can set hours Can pay extras

© 2014 OnCourse Learning Using Technology Computer information MLS, tax information, mortgage rates, maps Computer software Cell phones Voice Mail PDA

© 2014 OnCourse Learning Obtaining the Listing Listings are the company’s merchandise Comparable market analysis (CMA) 1. Square footage 2. Compare subject property to: Recent sales Active listings 3. Seller proceeds 4. Listing contract 5. Marketing

© 2014 OnCourse Learning The Listing Contract Listing contac Listing contact: Seller’s price and terms, broker services and amount of commission Signed by owners Restrictions Broker responsibility Personal property Fixtures Seller costs

© 2014 OnCourse Learning The Listing Contract Basic information: 1. Description of the property 2. Amount of commission and when paid 3. Expiration date 4. Signature of parties charged

© 2014 OnCourse Learning Exclusive Right to Sell Exclusive-right-to-sell: Exclusive-right-to-sell: Sole right to sell given to one firm Broker receives commission regardless of who sells

© 2014 OnCourse Learning Exclusive Right to Sell Listing Contract Property Description Figure 8.3 Amount of commission Expiration Price and terms Conditions Earnest money divided between seller and broker

© 2014 OnCourse Learning Exclusive Right to Sell Listing Contract Figure 8.3 Signatures of owners Title information / warranty deed Promise to maintain property Signature of agent Lockbox / MLS

© 2014 OnCourse Learning The Listing Contract Exclusive Agency One broker No commission owed if owner sells Open Listing Multiple brokers No commission owed if owner sells

© 2014 OnCourse Learning The Listing Contract Net Listing Seller receives net amount Broker receives any amount over the agreed net 100% - 7% 93% =.93 $150,000 ÷.93 = $161,300 (rounded up)

© 2014 OnCourse Learning The Listing Contract Flat Fee Listing Range of services based upon the fee Lower fee collected upfront Seller charged for co-op Discount Broker Fee less than prevailing rate Same service – cost kept at minimum

© 2014 OnCourse Learning Agent Compensation No set commission rate - negotiable Antitrust Laws Commission payment terms: Broker produces a ready, willing and able buyer Prove performance Sale consummated Fee is paid if seller terminates

© 2014 OnCourse Learning Terminating Mutual consent Seller breach – broker may sue for damages Broker breach – owner may terminate Death of either party Economic change Property destroyed Listing prevails until sold or expired

© 2014 OnCourse Learning Terminating Expiration of time Written termination dates Automatic extensions Illegal Listing prevails until sold or expired

© 2014 OnCourse Learning Multiple Listing Services Multiple lasting service (MLS): Multiple lasting service (MLS): Group of brokers who share listings National Association of REALTORS® July 1, Subagency is optional Must offer cooperation and compensation Computer access Processing time limits

© 2014 OnCourse Learning Antitrust Law Antitrust Act: Sherman Antitrust Act: fair trade Price fixing prohibited Market dictates the fee Restraint of trade Boycotting

© 2014 OnCourse Learning Real Estate Associations Voluntary organization of personas engaged in the real estate business Promotes ethics Protects property rights Secures benefits for members State and local associations

© 2014 OnCourse Learning Real Estate Associations Registered

© 2014 OnCourse Learning Real Estate Associations Specialize in property management courses Developed leadership training and relocation courses Organization of minority brokers promoting improved housing