-
What is an important thing to remember about listing agreements?
They must be in writing to be enforceable.
-
Describe an open listing.
An open listing is a non-exclusive listing that allows a seller or buyer to engage a number of different brokers to sell or help purchase property. The broker who brings the buyer or finds the suitable property gets the commission. If the owner sells the property or the buyer finds his or her own property, no commission is owed to any broker.
-
What is the major difference between an exclusive right to sell listing and an exclusive agency listing?
With exclusive right to sell, the broker has the exclusive right to market the property and receive a commission regardless of who procures the buyer. With exclusive agency, the owner retains the right to find a buyer and sell the property and owe the exclusive broker no commission.
-
Give an example of a compensation agreement that is not a listing agreement.
An agreement that a broker signs with an unrepresented seller in which that seller agrees that if he or she enters into a purchase contract with the buyer named in the agreement within a specified time period, the seller will pay a specified commission to the broker's firm at closing.
-
Most states require what four components to be on a listing agreement?
- An identification of the property
- A promise of compensation to the broker
- The specifics of that compensation
- Written document with signatures of the seller or sellers
-
How can an agent determine who has title to a property he or she is listing?
- Ask the seller for a copy of the deed or other title document.
- Call and check with a title company in the area where the property is located.
- Call or visit the county tax office and check the records.
-
When must the seller receive a copy of the listing agreement?
The seller must receive a copy of the document at the time the signatures are obtained.
-
Licensee Tim works for Broker Marty. Tim lists Seller Gary's home, fills out all the paperwork and signs the agreement. The listing agreement is a contract between whom?
The contract is between Broker Marty and Seller Gary. As an employee of Marty, Tim is acting as a subagent.
-
What is an MLS?
An organization of member brokers who agree to cooperate in the sale of properties listed by other brokers in exchange for a share of the broker's resulting commission
-
To provide the MLS with the necessary information about the property being sold, should the listing broker submit the listing agreement itself?
No. Instead, the listing agent should submit the information either on a state-provided form or in another means as agreed upon by local brokers or the Board of REALTORS.
-
Give some examples of the kind of site information you might collect to submit to the MLS.
- Lot dimensions
- Waterfront footage
- Zoning code and jurisdiction
- Topography, such as level or pasture
- View, such as golf course or mountain
-
What are the two most common changes to an original listing agreement?
Price changes and extensions to the listing period
-
When an amendment is made to a listing agreement, what happens to the terms of the original listing agreement?
All other terms and conditions of the original listing agreement remain unchanged.
-
What is required for a listing agreement to be modified after it has been signed by all parties?
The written consent of all parties
-
List three circumstances under which a listing agreement can terminate.
- Broker helped seller find ready, willing, and able buyer
- Expiration date of agreement arrived
- Parties mutually or individually agree to end relationship
-
If a transaction doesn't complete, under what circumstances would the broker still be entitled to a commission?
The broker is still entitled to receive the commission if the transaction does not complete due to the seller's or buyer's default.
-
Broker Sara has lost her license for unprofessional conduct. What will happen to her listings?
The state licensing authority can choose to appoint a temporary broker to close any of Sara's pending transactions. Otherwise, all Sara's listings will terminate.
-
is a legally-binding contract that creates an agency relationship authorizing a broker to serve as the agent for a principal in a real estate transaction.
The listing agreement
-
Listing agreements must be _____ to be enforceable.
In writing
-
The three most common types of listings are:
- Open Listing – non-exclusive, unilateral contract allowing agent to serve either seller or buyer
- Exclusive Right to Sell Listing – broker has exclusive right to market the property
- Exclusive Agency Listing - broker or owner has right to sell property
-
The most widely used agreement is the_____
exclusive right to sell listing agreement.
-
– broker collects any moneys above owner asking price; illegal in many states
Net Listing
-
Buyer's Agency Agreement 3 types
- Exclusive buyer agency agreement
- Exclusive agency buyer agency agreement
- Open buyer agency agreement
-
Compensation vs. Listing Agreement2
- All listing agreements have compensation clause
- Compensation agreement can be between broker and his/her employees or between broker and unrepresented seller
-
Parts of Listing Agreement
- Identification of property
- Promise of compensation
- Specifics of compensation
- Signed written document
-
Signatures
all owners must sign
seller can check for all owners of property via2
title company or county tax office
-
agent must give seller copy of agreement when
immediately when signed
-
Avoiding Agency Conflicts2
- broker must always be clear that he/she is seller's agent
- broker should always ask buyer if he/she is represented by another agent
-
organization of brokers who agree to cooperate in the sale of properties listed by other brokers for share of commission
Multiple Listing Service
-
Modifying Listing Agreement;
only with written consent of ______
best to use form designed for modifications – called
- All parties
- listing amendment form
-
Listing Agreement Termination reasons 7
- Performance – The licensee has helped the seller find a ready, willing, and able buyer to purchase his or her home.
- Expiration of the agreement term – The date arrives that was stated in writing on the listing agreement.
- Termination – The parties either mutually agree to end the relationship or one party decides to end it.
- Death of broker, unless temporary agent appointed
- Brokerage goes out of business
- Broker loses license
- Listing agent transfers to different agency, listing stays with original signing agency
-
If transaction does not complete, seller may still have to pay commission to broker if:7
- Seller refuses to sell
- Seller's spouse won't sign deed
- Seller has title with uncorrected defects
- Seller commits fraud regarding transaction
- Seller cannot deliver possession
- Seller insists on terms not included in agreement
- Seller and buyer mutually agree to cancel sale
-
Buyer required to pay his/her own broker if:4
- Broker performs according to terms of contract
- Buyer decides not to purchase
- Buyer purchases "for sale by owner" property
- Buyer purchases through another broker
-
Only a___ can initiate an action or file a suit against a seller or a buyer to receive payment of a commission. An____ cannot initiate such an action against a client.
-
Most listing agreements have a clause in place (often called a___or___) which says that the broker is still entitled to a commission for a set period of time after the listing expires, if the property is sold to a prospect that the broker introduced to the property during the time of the listing.
carryover or safety clause
-
How does a licensee make a change to a listing agreement
The licensee crosses out old info and writes in change
-
If the real estate transaction does not complete, the seller may still be responsible for pay a commission to the listing broker if,
The seller has spouse who wont sign the deed
-
The listing type that assures a broker that he will receive compensation no matter who procures the buyer is what kind of agreement
Exclusive right to sell
-
What happens to a listing agreement when the brokers firm goes out of business
The states real estate license agency my choose to appoint a temporary broker to close the transaction
-
A safety clause in a listing contract means whate
The broker may claim a commision if the owner sells to a person the broker introduced to the property within a certain time after the listing expired
-
The difference between an exclusive right to sell listing and an exclusive agency listing has to do with what issue
Commission
-
What does a carryover clause do
Allow broker to collect commission for period of time after listing expires
-
Listing agreement considered a unilateral contract
Open
-
In what section of MLS listing would you find type of foundation used in the construction of a home
Building information
-
Define a land contract.
A contract in which the seller finances the sale of real estate in installment payments from the buyer rather than financing through a third party lender.
-
Briefly explain how a land contract works.
The seller and buyer negotiate the contract, based on an agreed purchase price which the buyer will pay over an expressed amount of time. The buyer then has the right to possess the property and is the owner for tax purposes. Once the agreed purchase price has been paid, the seller transfers the title to the buyer.
-
Explain equitable conversion.
Equitable conversion is treating land as personal property under certain circumstances. It gives the buyer a real property interest from the date the land contract is signed.
-
Define amortization.
This is the length of time a land contract will run. It depends on the size of the contract, monthly payment, and interest rate being charged.
-
In which type of land contract does the buyer make payment to the seller who then pays an underlying lender's payment?
Wrap-around contract
-
In which type of land contract does the seller earn interest on the difference between what the seller owes on an existing loan and what the buyer is paying for the property?
Wrap-around contract
-
In which type of land contract does Indiana have no provisions in the Codes?
Power of sale
-
In which type of land contract does the buyer save money on monthly payments because the buyer is not paying a higher interest on the balance owed on an existing, underlying loan?
Straight land contract
-
How can a forfeiture clause affect the buyer in a land contract?
If the land contract contains a forfeiture clause and the buyer defaults on payments, the seller can end the contract, take possession of the property, and keep the payments made by the buyer.
-
Name four advantages of a land contract to the seller. 6
- Quicker and less expensive than complying with bank financing
- Flexibility in negotiations
- No large sum of money to be taxed on
- Interest goes directly to seller
- Easier to repossess property if buyer defaults
- Seller keeps legal title until final payment
-
With so many advantages for the seller, what is the main disadvantage?
Buyer may have poor or no credit history which increases risk of buyer default.
-
Why should a buyer research the seller's property title before entering into a land contract?
To be sure there are no judgment liens, mortgages, or other interests on the title prior to the signing of the land contract
-
Why should the seller require the buyer to get homeowner's insurance and whose name(s) should be on the policy?
The seller does not want to be responsible for the property after the land contract is signed. Both seller and buyer should have their names listed on the policy.
-
What does an acceleration clause do?
This clause allows the seller to force the buyer to refinance the property if the condition of the property becomes a risk to the seller's financial investment.
-
Since the seller already may know the buyer has weak credit, does the seller need to bother to pull a credit report on the buyer? Why or why not?
The seller should always pull a credit report on a buyer to look for credit situations which would raise a red flag as to the advisability of financing for this particular buyer.
-
What important clause should be included in a land contract to help protect the seller if the buyer defaults?
Time-is-of-essence clause
-
Why is it easier for a seller to terminate a land contract and recover possession of the property if the buyer defaults.
Courts generally do not view land contracts the same as mortgages and so they are not subject to mortgage laws.
-
What are the two situations where forfeiture is appropriate in Indiana?
- When the buyer abandons or absconds
- When the buyer has paid a minimum amount on the contract at time of default and attempts to retain possession while the seller pays taxes, insurance, and other upkeep
-
Explain the SAFE Act.
The SAFE Act establishes a nationwide mortgage licensing system and registry to protect against mortgage fraud. It requires individuals who extend financing for the purchase of property, including sellers under land contracts, to be licensed. The exceptions are selling an individual's own home, a commercial building, or selling and financing for an immediate relative.
-
Land contract;
Seller_____ property for buyer
Buyer entitled to move into property when____ _____
Buyer does not obtain title until ___ ___ ___
- finances
- Contract signed
- all payments made
-
Types of land contracts3
- Wrap-around contracts – when there is an existing mortgage
- Straight contracts – no override of interest
- Power of sale – right, title, and interest is assigned to trustee to secure the seller and buyer obligations; no provisions in Indiana Code
-
Land contract benefit to buyer 3
- Payment terms
- Freedom to negotiate
- Immediate possession of property upon signing of contract
-
Land contract Disadvantages to buyer3
- If contract contains forfeiture clause, buyer can lose property upon default
- Courts look negatively on forfeiture clauses
- If seller's existing mortgage does not get paid off, transfer of title may not happen
- Seller can burden property with liens or sell oil rights, etc.
-
Land contract Benefits to seller 5
- Quicker and less expensive than using third party lender
- Flexibility in terms negotiations
- No large sum of money to be taxed on all at once
- If buyer defaults, seller not bound by mortgage foreclosure laws; can recover possession more quickly and less expensively
- Seller retains legal title until buyer makes final payments
-
Land contracts Disadvantages to seller3
- Buyer may be poor credit risk
- Greater chance of buyer default
- Buyer could sell interest in property to third party unless stipulated in contract
-
land contract Tips for buyers5
- Obtain appraisal
- Research title and obtain title insurance
- Use holding company for executed deed and original documents
- Record contract immediately
- Consult with attorney
-
Land contract Tips for sellers 8
- Consult with attorney
- Pull buyer's credit report
- Require title insurance
- Require buyer to get homeowner insurance policy
- Hire disbursement company to collect payments
- Ask buyer to pay taxes directly to disbursement company
- Include acceleration clause
- Include clause to forbid assignment
-
Exceptions to safe act 3
Exceptions include selling of own home, commercial building, or financing for immediate relative.
-
Parties who extend financing for the purchase of real estate to be licensed is required by
Safe act
-
For buyers protection, the land contract should require the seller convey ___ ___ at the completions of contract
Marketable title
-
Indiana courts will enforce forfeiture only under circumstances with notions of ___ and ___ under the law
Fairness and justice
-
Forces the buyer to refinance the property if the condition of the property becomes a risk to the sellers financial investment
Acceleration clause
-
To prevent waiver of time is of the essence clause, what should seller do
No accept late payments
-
Treating land as personalty and personalty as land
Equitable conversion
-
What type of contract is a land contract
Bilatteral contract
-
The interests of a seller and a buyer under a land contract are determined by
The doctrine of equitable conversion
-
Which type of land contract not covered under provisions of Indiana code
Power of sale
|
|
