When a home owner decides to sell their home, they would usually like to showcase their home to a broad part of the market. They can do this by working with a real estate broker, who will place their home in a market listing. This is a list of homes for sale in the general area, containing important information such as sales prices.
The broker and the seller will usually create a listing agreement, which is a contract stating the terms under which the broker can promote the seller’s home. There are many different types of real estate listings, such as open listings, exclusive listings, and many other types. These may be regulated by state and local real estate standards, as well as professional standards for brokers and real estate agents.
A real estate listing agreement needs to include certain information in order to be valid. A valid listing agreement should contain:
- The start date and end date of when the property will be posted in the listing
- The price at which the home is going to be offered up for sale (i.e., the “list price”)
- How the sales broker will be compensated-whether through flat fees or percentages of the sale (i.e., broker’s commission)
- Terms regarding brokerages fees paid by the selling party
- The broker’s scope of authority regarding co-agreements with other brokers
- The broker’s scope of authority regarding the existence of previous offers
Thus, under real estate laws and guidelines, these provisions need to be included and followed in any real estate listing agreement. A failure to include any of these legal issues may result in the document being voided. Violations can also affect subsequent home sales transactions.
Violations of real estate listing agreements can often lead to some very serious consequences. For instance, the seller may lose some very important opportunities to sell their home if a misunderstanding has occurred. A common mistake is where there is an error or even negligence regarding the price of the home.
In such cases, the broker may become liable to the seller, and may be required to pay damages for any losses. In very serious cases, the broker may even be penalized by their licensing authority.
In any home sales transaction, the assistance of a lawyer is highly recommended. You may wish to hire a qualified real estate attorney in your area if you are considering forming a real estate listing agreement. Your lawyer can review the documents with you to determine how they may affect your rights as a seller. Also, in the event of a lawsuit or any legal disputes, your lawyer can help represent you during trial.