6. Brokerage Agreements

Unit 6. Brokerage Agreements

Buyer Agency Agreement

A principal-agent relationship in which the sponsoring broker is the agent for the buyer, with fiduciary responsibilities to the buyer.

Competitive Market Analysis (CMA)

A comparison of the prices of recently sold homes that are similar to a listing seller’s home in terms of location, style, and amenities.

Contemporaneous Offers

When a buyer’s agent is acting as a designated agent for more than one perspective buyer who the designated agent has reason to believe is making or preparing to make contemporaneous offers to purchase the property located at a specific address, the buyers have the option of being referred to another designated agent who will serve as the agent of the buyer.

Exclusive-Agency Listing

A listing contract under which the owner appoints a broker as his exclusive agent for a designated period of time to sell the property on the owner’s stated terms for commission. The owner reserves the right to sell without paying anyone a commission if he sells to a prospect who has not been introduced or claimed by the sponsoring broker.

Exclusive right-to-sell listing

A listing contract under which the owner appoints a designated broker as his exclusive agent for a designated period to sell the property on the owner’s stated terms. The owner agrees to pay the designated broker a commission when the property is sold, whether by the designated broker, the owner, or another broker.

Market Value

The most profitable price that property would bring in an arm’s-length transaction under normal conditions on the open market.

Minimum Services

A provision of the Real Estate License Act of 2000 that requires licensees to perform a minimum level of service to clients.

Multiple Listing Service (MLS)

A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most MLSs accept exclusive-right-to-sell or exclusive-agency listings from their member brokers.

Net Listing

A listing based on the net price the seller will receive if the property is sold. Under the net listing the sponsoring broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is legal in Illinois, but discouraged.

Open Listing

A listing contract under which the sponsoring broker’s commission is contingent on the sponsoring broker procuring a ready, willing, and able buyer before the property is sold by the seller or another sponsoring broker.

Option Listing

Listing with a provision that gives the listing sponsoring broker the right to purchase the listed property.

Statute of Frauds

The part of a state law that requires that certain instruments, such as deeds, real estate sales contracts, and certain leases, be in writing to be legally enforceable.