Ch.2 Listing Agreements and Property Disclosures Review

Flashcards covering types of listing agreements, required contract elements, specific C.A.R. form provisions, and statutory property disclosures required in California residential real estate.

What is the definition of a listing agreement?

A contract between a seller and a broker in which the seller agrees to have the broker find a buyer for a property in exchange for compensation.

Under an open listing, what must an agent be to receive a commission?

The procuring cause of the sale, meaning the person primarily responsible for bringing about the purchase agreement.

How does an exclusive agency listing differ from an exclusive right to sell listing regarding the seller finding a buyer?

In an exclusive agency listing, the seller does not owe a commission if they find the buyer themselves; in an exclusive right to sell listing, the broker earns a commission regardless of who sells the property.

What is a net listing?

An arrangement where the seller receives a specific sum from the sale and the real estate agent keeps any amount over that net sum as their compensation.

What specific timing element does California law require for all exclusive listing agreements?

A definite termination date.

According to the California Statute of Frauds (Civil Code Section $1624$), what is required for a listing agreement to be enforceable?

It must be in writing and signed by the party to be charged (the seller).

Why is a street address generally insufficient for the property description in a listing agreement?

Street addresses are assigned for mail delivery and do not indicate property boundaries; a legal description is preferred.

What is the purpose of a safety clause (also known as a protection or extender clause)?

It ensures the seller owes a commission if they sell the property to someone who learned about it through the broker within a certain number of days after the listing expires.

What is a 'pocket listing'?

A listing where the seller has checked a box to opt out of having their property listed on the Multiple Listing Service (MLS).

What does the 'hold harmless clause' protect the broker from?

Legal trouble or expenses resulting from incorrect information provided by the seller regarding the property.

In the dispute resolution section of a C.A.R. listing agreement, what is the required first step before filing a lawsuit?

Mediation.

How is arbitration different from mediation?

In arbitration, a neutral party issues a binding decision, whereas a mediator helps parties find a solution without imposing one.

What are the rescission timeframes for a buyer after receiving a Transfer Disclosure Statement (TDS)?

$3$ days after personal delivery or $5$ days after delivery by mail or electronic means.

Which residential transactions are exempt from the Transfer Disclosure Statement requirement?

New construction in a subdivision requiring a public report, court-ordered sales (like probate), transfers between spouses/co-owners, and foreclosures.

What is the purpose of the Natural Hazard Disclosure Statement?

To disclose if a property is located in a designated earthquake fault zone, seismic hazard zone, flood hazard area, or high forest fire risk area.

At what age of a residential property is 'The Homeowner’s Guide to Earthquake Safety' required to be provided?

Properties built before $1960$.

What does federal law require for housing built before $1978$?

A Lead-Based Paint Disclosure and a $10$-day period for the buyer to conduct an inspection.

What must a seller disclose regarding Mello-Roos?

If the property is subject to a lien that secures a special assessment for community services under the Mello-Roos Community Facilities Act.

If a buyer breaches a contract and the seller keeps the deposit as liquidated damages, how is the broker compensated according to the C.A.R. form?

The broker receives one-half of the recovered money, not to exceed the amount of the commission they would have earned.

What is the required formatting for the notice stating commission rates are negotiable in a residential listing agreement?

It must be in boldface type.