chapter 12 the broker’s role in the transfer of real estate
TRANSCRIPT
Chapter 12
The Broker’s Role in the Transfer of Real Estate
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
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)
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
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
Checklist for an Effective Listing Agreement *
Type of listingType of listing1. Open2. Agency3. Exclusive right to sell4. Net5. Multiple listing
Duration of listingDuration of listing1. Length2. Extension clause3. Termination
a. Reasons, methods, notice, damages
Name of ownerName of owner1. Is owner authorized?2. Who holds title?3. Is there more than one owner?4. What about signatures?
* Should be written
Checklist for an Effective Listing Agreement
Selling termsSelling terms1. Price2. Financing3. Date of transfer
Entitlement to commissionEntitlement to commission1. Ready, willing, and able2. No sale, no commission3. Fraud or bad faith by the seller
4. Good title5. Rental or occupancy6. Easements
Property descriptionProperty description1. Accurate legal desc. 2. Correct parcels
SOLD
Checklist for an Effective Listing Agreement
Marketing rightsMarketing rights1. Multiple listing2. Advertise3. Showings4. Place sign on property
Duration of listingDuration of listing1. Earnest money2. Effect on listing
Liability limitationsLiability limitations
Condition precedentCondition precedent1. Court approval2. Buyer financing3. Sale or other property
FOR FOR SALESALE
Broker Duties
• Fiduciary to principal
• Duty of loyalty
• Duty of disclosure
• Duty of competence
• Duty of care
• Duties (some statutory) on earnest money
Disclosure Issues for Brokers
• Misrepresentation
• Intentional misrepresentation
• Fraud
• Nondisclosure
• Sales puffing
• Safety standards
• Statutory duties of disclosure and nondisclosure
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)
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)
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.
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