Real Estate Principles

Ninth Edition

Real Estate:
An Introduction to the Profession
Ninth Edition

By Charles J. Jacobus
South-Western Publishing©2002

South-Western Publishing©2002
 Chapter 20

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The Principal-Broker Relationship:
Employment

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 Listing Agreement

• An employment contract between the

owner/seller and the real estate broker.

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Listing Contract Types
1. Exclusive right to sell
2. Exclusive agency
3. Open listing
4. Net listing

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 Exclusive Right to Sell

• The listing broker is entitled to a commission

no matter who sells the property during the
listing period.
• This is the most common type of listing.

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 Exclusive agency

• Similar to the exclusive right to sell except the

owner may sell the property himself during the
listing period and not owe a fee to the broker.
• Broker may be less enthusiastic under this
form of listing.

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 Open listing

• There are no exclusive rights.

• Whoever sells the property will earn the fee.
• Brokers are reluctant to develop a sales effort.

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 Net listing

• Owner states the price he wants for the

property and agrees to pay the broker anything
above this amount as commission.

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 Buyer Representation

• Exclusive Authority to Purchase – an

agreement where the broker works for the
client, the buyer!
• Primary responsibility is to the purchaser.
• Principal is now the Buyer.
• Buyer Agency!

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 MLS

• A service among Realtor® members to offer

compensation to other member brokers and
increasing the market exposure for the listed
property.

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 Broker Compensation

• Commission earned when agreed between

owner and broker.
• Usually occurs when a “ready, willing and
able buyer” is produced.
• Procuring cause is the one whose efforts
originated the procurement of the sale.

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 Key Terms
• Advance fee listing • Multiple listing service
• Broker (MLS)
• Exclusive authority to • Net listing
purchase • Ready, willing, and able
• Exclusive right to sell buyer
• Real estate listing

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