Open listing
- carry no exclusive rights. An owner can given an open listing to any number of
brokers at the same time, and the owner can still find a buyer and avoid commission.
This gives the owner the greatest freedom of any form, but provides little incentive for brokers.
Net listing
- created when an owner states the price she wants for her property and then agrees to
pay the broker anything above that price as the commission.
Exclusive authority to purchase
Above, we presumed the general rule that the real estate broker represents the seller.
Historically, it has been the seller who has hired brokers to assist in marketing property
consumers are far more sophisticated and informed today
in these cases, the broker’s primary responsibility is to the purchaser rather than to the
seller. In this circumstance, the purchaser can reveal confidential information to the
broker and rely on the broker’s expertise and competence.
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.
Compensation issues
o
Commission splits
o
customary practices
o
Separate agreements
Multiple listing service
MLS
organizations enable a broker with a listing to make a blanket offering of
subagency and/or compensation to other member brokers, thus broadening the market
exposure.
Multiple listing service
- organization of member brokers agreeing to share listing
information and share commissions.
Greater sales exposure
Easier for buyers to view what all is for sale from one location, easier for a broker
because the seller’s property may be ore suitable in other offices
Electronic marketing- most MLS systems allow up to 8 photos so a buyer can see
pictures of the property before visiting. Buyer can also take a virtual tour through a
neighborhood without leaving the office.
Broker compensation
Listing brokers
Commission earned per agreement between owner and broker. (Listing agreement)
Earned when a
ready, willing, and able buyer
is found. This means they are ready to
buy at the seller’s price and terms, and has the financial capability to do so.
Commission is due once broker has performed this duty, whether or not the sale is made
—this is the benefit from the ready, willing, and able contract.
The “no sale, no commission” approach is to the owner’s advantage.
Buyer’s brokers
Buyer’s brokers issues are a little more complicated.
Most agreements provide that the buyer’s broker be compensated by the seller’s broker
License act requirements
In Texas, real estate license act sets specific requirements that a person must comply with
to maintain an action for a commission.
