Chapter 13

Chapter 13 - Chapter 13 Real Estate Brokerage and Listing...

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Chapter 13 Real Estate Brokerage and Listing Contracts 3/18/08 Real Estate Brokerage Business Real Estate Brokerage Business is the largest and most visible component of the real estate industry. What real estate brokers do: o Facilitate real estate transactions They are regarded as facilitators of market value because they physically bring buyers and sellers together to create sales and purchases. o Act as an intermediary between buyers and sellers or landlords and tenants o Collect commissions as compensation for successful transaction Commissions are usually paid by sellers, but they may be paid by buyers or—in some unusual situations—by buyers and sellers Net listing- where the seller is assured a certain fixed net price for the property and the broker is allowed to retain any amount of the actual sales price above that figure. Brokerage Functions: o Successful brokers have knowledge and expertise in the following areas: Provide knowledge of pricing in the local market Marketing approaches that are successful Knowledge of legal obligations of sellers and buyers Procedures and transaction requirements Market conditions Negotiating advice o When people sell property without a broker to avoid commission cost, they often take for granted the knowledge and skill a broker could use to sell the property for a higher value. Usually, using a broker yields more money. Law of Agency Where an agent represents a principle . o A principal is an individual that authorizes another party, the agent, to act on their behalf in some manner. The agent has a fiduciary relationship with the principal requiring trust, confidence and competency; putting the interest of the principal above the interest of the agent. Where a real estate broker represents a party in real estate transaction. Types of Agents Defined by the scope of responsibilities: o Universal Agent - authorized the act on the principal’s behalf in all matters;
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example- a legal guardian o General Agent - authorized to represent a principal in a specific business; examples include: An insurance agency to an insurance company A property manager to a property owner A real estate sales person to a real estate broker. o Special Agent - authorized to represent the principal in a specific business matter; such as a real estate broker Representing an owner of a property in a sales transaction trough a listing agreement Representing a buyer in a real estate purchase Representing a landlord in a lease transaction Representing a tenant in a lease transaction *the agency relationship is between the principle and the agent. Fiduciary Responsibilities
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Chapter 13 - Chapter 13 Real Estate Brokerage and Listing...

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