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Chapter 12 The Broker’s Role in the Transfer of Real Estate.

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Presentation on theme: "Chapter 12 The Broker’s Role in the Transfer of Real Estate."— Presentation transcript:

1 Chapter 12 The Broker’s Role in the Transfer of Real Estate

2 Know Your Terminology Agent vs. Broker Broker vs. Realtor® Listing agent vs. selling agent Seller’s agent vs. buyer’s agent Dual agency vs. one-party agency Buyer broker vs. seller broker

3 Types of Listings and Listing Terminology Open listing Exclusive agency listing Exclusive right to sell or exclusive listing to sell Multiple listing Subagency Dual agency (continued on next slide)

4 Types of Listings and Listing Terminology (cont.) Cooperating broker Net listing Designated agent Nonagent broker or transaction broker or limited agent or statutory broker Internet listing

5 The Listing Agreement Evidence of agreement Oral agreements will not allow for commissions in most states Signature (authentication Authority to sign as owner, agent, executor, administrator Expiration date Amount of commission When a commission is due and owing –Ready, willing, and able buyer –No deal, no commission

6 Checklist for an Effective Listing Agreement * Type of listing 1.Open 2.Agency 3.Exclusive right to sell 4.Net 5.Multiple listing Duration of listing 1.Length 2.Extension clause 3.Termination a.Reasons, methods, notice, damages Name of owner 1.Is owner authorized? 2.Who holds title? 3.Is there more than one owner? 4.What about signatures? * Should be written

7 Checklist for an Effective Listing Agreement Selling terms 1.Price 2.Financing 3.Date of transfer Entitlement to commission 1.Ready, willing, and able 2.No sale, no commission 3.Fraud or bad faith by the seller 4.Good title 5.Rental or occupancy 6.Easements Property description 1.Accurate legal desc. 2. Correct parcels SOLD

8 Checklist for an Effective Listing Agreement Marketing rights 1.Multiple listing 2.Advertise 3.Showings 4.Place sign on property Duration of listing 1.Earnest money 2.Effect on listing Liability limitations Condition precedent 1.Court approval 2.Buyer financing 3.Sale or other property FORSALE

9 Broker Duties Fiduciary to principal Duty of loyalty Duty of disclosure Duty of competence Duty of care Duties (some statutory) on earnest money

10 Disclosure Issues for Brokers Misrepresentation Intentional misrepresentation Fraud Nondisclosure Sales puffing Safety standards Statutory duties of disclosure and nondisclosure

11 A Checklist for Brokers on Disclosure Ask about the property repair record. Ask about the utilities. Ask about the condition of appliances, roof, walls, and basement. Include pertinent information about physical condition in the listing agreement. Make an independent investigation of the property, carefully looking for recent cover-ups, redecorating, and hidden defects. (continued on next slide)

12 A Checklist for Brokers on Disclosure (cont.) Consider a warranty policy for the home. Consider having a professional home inspection. Make no statement that is not based on your firsthand information or knowledge. Have available a list of addresses and phone numbers for municipal, state, and country offices, so that the prospective buyer may make independent checks on information. (continued on next slide)

13 A Checklist for Brokers on Disclosure (cont.) Do not fail to disclose pertinent information, and do not participate with the seller in a nondisclosure scheme. Take measurements to verify room sizes and square footage. Follow up on the buyer’s questions for which you have no answer or knowledge.

14 Grounds for Loss of Broker’s License: Suspension or Revocation Commingling of funds Discriminating practices Conviction of a felony False advertising Splitting commissions with an unlicensed party Failure to deliver required documents Failure to submit all offers Breach of duties to seller and unethical conduct The unauthorized practice of law

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