Modern Real Estate Practice in Pennsylvania 12 th

Modern Real Estate Practice in Pennsylvania 12 th Edition Chapter 18: Listing Agreements and Buyer Representation Contracts

18 Listing Agreements and Buyer Representation • Learning objectives – Identify the different types of listing and buyer representation agreements and their terms – Describe the ways listing and buyer representation agreements may be terminated – Identify statutory and regulatory issues related to listing and buyer representation agreements – Distinguish characteristics of various types of listing and buyer representation agreements – Define key terms © 2012 Kaplan, Inc. 2

18 Listing Agreements and Buyer Representation • Written agreements (RELRA Section 608. 1) – In writing – Negotiated agreement • Broker fee • Duration – Broker may work with competing parties – Broker policy of cooperation and compensation – Purpose of Real Estate Recovery Fund – Any possibility of conflict of interest – Consumer Notice © 2012 Kaplan, Inc. 3

18 Listing Agreements and Buyer Representation • Listing agreements – Between broker and consumer – For professional services – Only the broker is authorized to represent the consumer • Broker authorizes affiliated licensees • Listing stays with broker • Broker dispenses compensation © 2012 Kaplan, Inc. 4

18 Listing Agreements and Buyer Representation • Listing agreements – Exclusive-right-to-sell listing – Exclusive-agency listing – Pennsylvania requires statement in bold • the broker earns a commission on the sale (or lease) of the property, regardless of who, including the owner, makes the sale (or lease) during the listing period. – Open listing – Multiple-listing (MLS) – Net listing © 2012 Kaplan, Inc. 5

18 Listing Agreements and Buyer Representation • Termination – Purpose is fulfilled – Expiration of listing period – Property is destroyed or use is changed – Title is transferred under the law – Mutual agreement of the parties – Death or incapacity of either party – Breach © 2012 Kaplan, Inc. 6

18 Listing Agreements and Buyer Representation • Listing process – Basic information required – Pricing the property • Comparative market analysis • Not an appraisal • Required PA statement – This analysis has not been performed in accordance with the Uniform Standards of Professional Appraisal Practice which require valuers to act as unbiased, disinterested third parties with impartiality, objectivity, and independence and without accommodation of personal interest. It is not to be construed as an appraisal and may not be used as such for any purpose. © 2012 Kaplan, Inc. 7

18 Listing Agreements and Buyer Representation • Seller real estate disclosure act – Seller required to disclose – One- to four-family dwellings – All material defects – Licensee must advise seller of seller’s duty – Signed and dated disclosure to buyer prior to buyer signing an agreement of sale © 2012 Kaplan, Inc. 8

18 Listing Agreements and Buyer Representation • Listing agreement issues – Broker’s authority and responsibilities – Names of all parties – Brokerage firm – Listing price – Real and personal property – Leased equipment – Seller’s Return © 2012 Kaplan, Inc. 9

18 Listing Agreements and Buyer Representation • Listing agreement issues – Description of the premises – Proposed closing and possession dates – Closing details – Evidence of ownership © 2012 Kaplan, Inc. – Encumbrances – Warranties by owner – Antitrust wording – Nondiscrimination – Commission 10

18 Listing Agreements and Buyer Representation • Listing agreement issues – Termination – Broker protection clause – Owner warranties – Indemnification – Equal opportunity wording – Antitrust wording – Signatures and date © 2012 Kaplan, Inc. 11

18 Listing Agreements and Buyer Representation • Buyer representation issues – Disclosures – Parties’ rights and responsibilities – Specific services provided – Compensation © 2012 Kaplan, Inc. 12

18 Listing Agreements and Buyer Representation • Types of buyer agency agreements – Exclusive buyer agency – Exclusive agency buyer agency – Nonexclusive buyer agency • Gather information • Buyer representation agreement – Type of agreement – Time period – Property requirements and terms of purchase © 2012 Kaplan, Inc. 13

18 Listing Agreements and Buyer Representation • Buyer representation agreement – Broker protection clause – Authorization for designated agency (if applicable) – Provision for dual agency (if broker policy) – Provision for assignment of the contract – Signatures of all parties – Disclosures – Nondiscrimination wording – Disclosures as required by law or rule © 2012 Kaplan, Inc. 14