A TYPICAL LISTING

A TYPICAL LISTING

The Residential Listing Agreement, Exclusive - RLA is a listing for sale of one or more specifically described
parcels of real property. (This is one of several different types of listing agreements.) The phrase “right to sell”
means, “right to find a buyer.” It does not authorize the broker to sign transaction documents for the seller.

A typical listing authorizes the broker to:

• Place a “for sale” sign on the property;

• Place the property in a multiple listing service;

• Cooperate with buyer’s agents; and

• Accept on the seller’s behalf a prospective buyer’s good faith deposit.

Any modifications to the typical listing agreement are made using the Modification of Terms Authorization and
Right to Sell, Acquire or Rent- C.A.R. form MT.

1. Term

A listing must have a definite term. The term of the listing ends at 11:59 PM on a specified day.

2. Description of the Property

The description of the property should be specific and detailed. Accuracy of description avoids any doubt and
assists if needed in the enforcement of the listing on that ground.

3. Exclusion and Inclusions

Other than fixtures and fittings that are attached to the property, which are included, and personal property,
which are excluded, the licensee should be sure to specifically write in items the seller is including or excluding
from the sale. If there is any doubt or potential confusion it is best to specifically point out items that are
included or those items that are excluded.

4. Listing Price and Terms of Sale

The minimum requirement for setting forth the terms of sale, where cash is acceptable to the seller, is to express
the price in cash.

Complications may arise when the seller demands assumption of the existing loan or loans, or indicates a
willingness to pay part of the assumption fees or new set-up charges if the buyer assumes the existing loan or
refinances with the existing lender. Such terms of sale should be spelled out in detail.

If the sale may be financed by a VA or FHA loan, the listing will include details of the seller’s conditions with
respect to the payment of points.

Where a first loan can be assumed and the seller is willing to carry secondary financing, the specific terms of
the proposed secondary financing will be set forth.

If the sale is to be a 'short sale' - where the sales price is less than the encumbrances on the property - it should
be noted that lender approval of any offer will be required and a Short Sale Addendum (C.A.R. form SSA)
should be used.

5. Broker’s Compensation and Negotiability of Commission

In the sale of residential property of not more than four units, including a mobilehome, Business and
Professions Code Section 10147.5 requires that the listing (or whatever document initially establishes the
broker’s right to a commission, or increases the amount or rate of the commission) contain, in not less than 10-
point boldface type, the following provision before the compensation clause:

Notice: The amount or rate of real estate commissions is not fixed by law. They are set by
each broker individually and may be negotiable between the seller and broker.

A broker can set a typical commission rate for the firm, but cannot use a listing form in which the amount or
rate of compensation is preprinted or otherwise inserted prior to negotiation with the seller.

The compensation clause in a typical listing agreement will be specific and unequivocal. It will state simply that
the broker is entitled to the compensation, expressed either as a percentage of the purchase price or a dollar
amount, if the property is sold by the broker, by another broker, or by the seller during the term of the listing or
any extension of it. It also obligates the seller to pay the compensation if, without the consent of the broker, the
owner withdraws the property from sale or in some other way makes it unmarketable during the term of the
listing or any extension thereof.

A listing’s “protection clause” will designate a period of time after expiration of the listing during which the
broker’s compensation is protected if the owner personally sells to someone who physically entered and was
shown the property or who wrote an offer on the property. For this clause to be effective, the broker must,
either before or within the time specified in the agreement, notify the owner in writing of the names of the
prospective buyers with whom the broker has negotiated during the listing term.

6. Ownership, Title, and Authority

In a typical transaction the seller warrants they are the owner with the right to sell the property and no other
persons or entities have title. Any exceptions to ownership, title and authority should be noted.

7. Multiple Listing Service (MLS) ) and the Internet

A paragraph typically provides that the listing will be submitted to a designated MLS where information about
the property will be disseminated to members, who may also solicit potential buyers for the property. The MLS
and broker often have additional services to provide Internet access to registered clients via the brokers virtual
office website or to advertise the property on the Internet on sites like Realtor.com or through the brokers own
website using Internet Data Exchange (IDX) protocol.

8. Seller Representations

The seller typically represent that, unless specified in writing, they are not aware of any of the following:

• Notice of Default

• Loan Delinquencies

• Bankruptcy or insolvency affecting the property

• Threatened or pending litigation

• Current, pending or proposed special assessments

To notify the broker if the seller becomes aware of any changes in the items listed.

9. The Broker’s and Seller’s Duty

In return for the exclusive rights granted by the owner, the broker agrees to use due diligence in attempting to
find a suitable buyer and negotiate a sale. Thus, the listing is a bilateral contract.

The listing states that the right of the broker is “irrevocable.” Basically, this means that it cannot be revoked by
either party without the other’s consent. However, if there is a breach of contract (e.g., failure of the broker to
use due diligence), the contract may be subject to legal rescission.

The seller is responsible for determining at what price to list and sell the property and agrees to indemnify and
hold Broker harmless in actions resulting from any material fact the Seller knows but fails to disclose.

10. Deposit

This clause authorizes the agent to accept a certain deposit to be applied toward the purchase price. The proper
handling of earnest money deposits should be outlined by your employing broker and is discussed in more
detail in Chapter 23.

11. Agency Relationships

The broker is required to give the seller a Disclosure Regarding Real Estate Relationships – C.A.R. form AD.
In the event the selling broker also represents more than one buyer, the consent of both the buyers and the seller
is required by using the C.A.R. form, Disclosure and Consent For Representation Of More Than One Buyer Or
Seller – DA or equivalent. These requirements are discussed more completely in Chapter 10.

12. Security and Insurance

This clause advises the seller to take reasonable precautions in safeguarding valuables and discloses that 3rd
parties such as inspectors, virtual tour providers, prospective buyers, appraisers and others will access the
property and they may take pictures and videos. The clause also discloses to the seller that the broker does not
maintain insurance to protect the seller and is not responsible for loss of or damage to personal or real property.

13. Keysafe/lockbox

Authorizes the agent to place a key repository on the listed property.

14. Sign

Authorizes placement of broker’s “for sale/sold” sign on the property.

15. Equal housing opportunity clause

This clause is prima facie evidence of nondiscriminatory intent. The proof of compliance is, of course, that the
parties act in the spirit of the declaration.

16. Attorney’s fees

In the event of any legal action to resolve a dispute, this clause provides that the prevailing party will be paid
reasonable attorney’s fees.

17. Additional terms

Additional provisions could include: date for possession; rent if possession is delivered on a date other than
closing day; repairs to be made by owner; and termite work. Also, if the seller has a prospect, which the seller
personally located, the seller may wish to exclude a sale to that person from seller’s obligation to pay a
commission.

18. Management Approval

After its' execution, the broker or the broker’s designee has the right to approve the terms of the agreement
within 5 days or cancel the agreement in writing.

19. Successors and assigns

The agreement is typically binding on the seller’s successors and assigns.

20. Dispute Resolution

The seller and broker agree to first mediate any dispute regardless of the arbitration election. After mediation
the parties will arbitrate, if initialed by all parties to the contract. There are certain exclusions from mediation
and arbitration, most notably foreclosure, probate, bankruptcy and small claims actions.

21. Entire Agreement

It should be noted in the standard listing agreements published by C.A.R., all prior discussions and negotiations
are superseded by the written agreement. Thus it is important to commit to writing all terms and conditions.

22. Owner’s signature

All owners must sign the listing. If the property is owned by a partnership or a corporation, the proper officials
must sign and provide the appropriate authorization or resolution

23. Agent’s signature

When the listing is signed by an authorized licensee member of the broker’s staff or by the broker himself, it
becomes a (bilateral) contract, with a 5-day management approval contingency. Broker (or broker’s agent) must
give the seller a copy of the agreement at the time of signing.