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Chapter 9
Agency Contracts
| Question | Answer |
|---|---|
| Buyer-agency agreement | A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency. |
| Comparative 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; an estimate of market value. |
| Employment Contract | Formal employment between employer & employee, principal & agent. In real estate, listing agreement, buyer agency agreement or management agreement. |
| exclusive-agency listing | One broker is specifically authorized to act as the exclusive agent of the principal; broker receives a commission if any broker is procuring cause; seller can sell w/o obligation. |
| exclusive-right-to-sell listing | One broker is appointed as sole agent of the seller and is given the exclusive right, or authorization, to represent the property in question |
| extender clause or Override Clause | A clause in a listing contract that says the listing broker is entitled to commission for a time period after the listing expires if the property is sold to a prospect that the broker initially introduced to the client during the listing term. |
| listing agreement | An employment contract between a property owner and a real estate firm/broker by which the broker is employed to find a ready, willing and able buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission. |
| MLS | Multiple listing services |
| net listing | A listing based on the net price the seller will receive if the property is sold; broker can offer property at highest price to increase the commission. |
| open listing | A listing agreement under which the broker's commission is contingent on the broker personally producing a ready, willing, and able buyer before the property is sold by the seller or another broker. |
| Override clause | Used to guarantee a broker a commission if that particular property is sold to a specific buyer. Same as Protection Agreement. |
| procuring cause | The effort that began a chain of events that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission. |
| protection agreement | Used to guarantee a broker a commission if that particular property is sold to a specific buyer. Same as Override clause. |
| puffing | exaggerated comments or opinions; "This house has the best view in town!" |
| ready, willing, and able buyer | A buyer who is financially qualified, prepared to buy on seller's terms, and ready to take positive steps toward consummation of the transaction by showing willingness to enter into an enforceable contract. |
| retainer fee | Typically a small amount of compensation, usually paid up front by the buyer/client when the buyer-agency agreement is established. |
| success fee | Due and payable by the buyer/principal on the signing and acceptance of an offer to purchase property found by the buyer's agent. |
Created by:
whitwill
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