A Closer Look at the Listing Agreement Part II
Yesterday, we looked at Paragraphs 1 through 7 of the Residential Real Estate Listing Agreement Exclusive Right to Sell used by Texas REALTORS® to list your home for sale. Today, we’ll look through Paragraphs 8 through 16 of the listing agreement, and then follow up tomorrow with Paragraphs 17 through to the end. If you have any questions, please contact one of our real estate agents and they will be happy to assist you.
See yesterday’s post that covers the first section of the listing agreement.
Paragraph 8. Cooperation with Other Brokers This paragraph grants the broker the right to cooperate with and allow other brokers to view the property and defines what the listing broker will pay other brokers for representing the buyer or acting as a subagent. Remember, the fee for listing the home in Paragraph 5 is the total commission and what the broker pays the other brokers as defined in this paragraph comes out of that total.
Paragraph 9. Intermediary We’ve discussed intermediary at length in several posts, but this paragraph grants or denies the broker the ability to work as an intermediary. For more understanding of intermediary, see “Information About Brokerage Services: What’s All the Fuss?” and the other posts about intermediary mentioned there.
Paragraph 10. Confidential Information Grants the seller confidentiality unless required by law or except as authorized by the seller. Also informs the seller that broker must keep confidential information about other clients, current or former, unless required by law.
Paragraph 11. Broker’s Authority This paragraph covers quite a bit of ground, so let’s cover the key takeaways. The first is that the broker will use reasonable efforts to market the property, find a buyer, and negotiate the sale of the home. Section B allows a seller to voluntarily withhold their listing from the internet. They may also elect to not have their address appear on the internet (which will usually result in it not showing on most sites). Section C covers what types of financing the broker may market the property with. Section D is a laundry list of items that allow the broker to effectively market the home. Finally, Section E prohibits the broker from signing or executing any documents on behalf of the seller.
Paragraph 12. Seller’s Representations There are several sections to this paragraph, but to sum it up simply, this part of the listing agreement is all about the seller agreeing that they have the right to sell the property free and clear (other than a mortgage), that their pool or spa complies with local laws, and that they have given the broker true and correct information about the property. It also has a place for the seller to name any relocation company or employer that is providing benefits to them.
Paragraph 13. Seller’s Additional Promises Again a laundry list of items that the seller agrees to do. This paragraph is mostly about the seller working with the broker in marketing, showing, and sale of the property. The seller agrees to not rent or lease the property and if they do, they must provide the broker with copies of the lease. They also agree to not negotiate with a potential buyer directly, but rather refer them to the broker. This section also mentions the pool again and the seller agrees to maintain any pool or spa with regard to local law (this is obviously a case where someone got sued, so they’ve inserted language to fend off any future litigation). The last item is that the seller agrees to complete and disclosures or contracts and to amend them should the facts change during the listing agreement term.
Paragraph 14. Limitation of Liability The legal stuff. This paragraph is all about protecting the broker from lawsuits caused by the home, particularly due to negligence on the sellers part.
Paragraph 15. Special Provisions This is a blank section where items may be written in. Real estate agents are only allowed to add pertinent facts and business information to this section. We can not rewrite the contract, contradict items in the contract, or reiterate items already in the listing agreement. Typically, we’d say 99.9% of the time, this section should be blank.
Paragraph 16. Default This paragraph covers what happens if either the broker or seller breaches the contract. If the seller is found to be in default, they are liable to the broker for the commission amount mentioned in Paragraph 5. If the broker breaches the contract, the seller may seek remedies as allowed by law.
Don’t forget to come back tomorrow for the conclusion of our breakdown of the listing agreement.