OVERVIEW - A TYPICAL TRANSACTION

OVERVIEW - A TYPICAL TRANSACTION

An owner (the seller) of a single-family residence (the property) in California wishes to sell the property.

The seller enters into a Residential Listing Agreement, Exclusive - RLA (the listing) with a California real
estate broker (the listing broker).

Prior to entering into the listing, the broker is required to give the seller a Disclosure Regarding Real Estate
Relationships – AD form. This requirement is discussed more completely in Chapter 10. In addition, the seller
would typically be given an Estimated Sellers Proceeds – ESP or similar form. The listing typically provides
that it will be placed into a multiple listing service and the listing broker can cooperate/share the commission if
another broker (the selling broker) finds a buyer for the property. If the seller does not want the property listed
in the multiple listing service, the C.A.R. form Seller Instruction to Exclude Listing From the Multiple Listing
Service – SEL is used.

Licensee’s should note the typical Residential Listing Agreement, Exclusive – RLA allows 5 days for
management approval, and if the Broker or the Brokers Manager does not approve of its terms, the Broker or
the Brokers Manager has the right to cancel the agreement.

The selling broker finds a buyer purportedly ready, willing and able to purchase the property. An offer
(preceded by a Disclosure Regarding Real Estate Relationships – AD ) is made, negotiated, and accepted so
that a meeting of the minds is reflected in the Residential Purchase Agreement and Joint Escrow Instructions –
RPACA (the contract). If a dual agency exists, as soon as practicable the selling agent shall disclose to the
buyer and the seller the agents agency relationship. As soon as practicable the listing agent shall disclose to the
seller whether the agent is acting as a dual agent. These relationships shall be acknowledged by the
Confirmation of Agency relationships contained in the contract RPA-CA or by a separate form - Confirmation
of Agency Relationships - AC. In the event a broker's presentation of offers on behalf of two different buyers
occurs, the broker should obtain the clear, informed and unequivocal consent of both parties. C.A.R form DA
addresses this issue. This requirement is discussed more completely in Chapter 10.

The transaction, grounded in the conclusion of the sale negotiated by the listing and selling brokers, proceeds to
the legal transfer of title, completing the financing and providing the final settlement statement.

The typical licensee should note that extensive re-writing of any of the standard forms language is not advised
and could be construed as the unauthorized practice of law. Specific contract provisions relating to the buyer
and sellers unique situation should be outlined using the appropriate spaces provided in the standard forms or
by using additional forms such as counter offers or addendums.

The following sections of this chapter examine the provisions of a listing agreement and a typical residential
agreement involved in such a transaction and the required disclosures. The real estate practitioner should check
with the employing broker for any additional procedures required by the employing broker.