Travels through Property Law by Tom Brodersen, Esq.
What’s in that Listing Contract?
Many people hire attorneys to review both listing contracts and purchase and sale agreements before they sign them (and often prefer to have attorneys close the transaction as well). Other people seem perfectly comfortable signing these multi-page documents without even ever reading them through themselves. They are often told they are “standard” agreements and seem to assume that they are therefore “safe.”
I would suggest that there is no such thing as a “standard” agreement. There are a variety of forms of listing contracts, with different legal ramifications, just as there are different forms of purchase and sale contracts.
For our part, we real estate lawyers warn that many problems can’t be fully remedied after the agreements have been executed.
So, starting first with listing contracts, just what is in those agreements that can come back and hurt the owner?
First of all, a listing is the agreement between a property owner and a real estate broker by which that firm is engaged to give their best efforts to find a buyer ready, willing and able to purchase a property on the terms offered (or other terms the seller may ultimately accept).
Some of the problems in listing agreements are in four different areas:
1) Many listings provide for binding arbitration in the case of a disagreement between you and your broker. The problem with arbitration is the concern that they may favor the businesses that hire them. In addition, if you disagree with their ruling, there is no appeal.
2) Listing contracts often include language that would, under certain circumstances, leave you liable to a pay full commission even if there is no closing. Most sellers would never expect such an outcome, and I always strike that language.
3) In the event that the seller changes his mind about selling, or just doesn’t think the broker is doing an adequate job, there are often very tough conditions attached to cancellation, again a situation that most sellers would not expect.
4) Some listing agreements also provide that the broker can transfer the listing to another broker should they desire. It seems to me like they should ask you, the seller, for permission if they want to do that.
To their credit, most real estate brokers work very hard to get your property sold and are usually successful. But just as good fences make for good neighbors, good contracts make for good professional relationships.
ANDERSON & BRODERSEN, P.A.,
350 Corey Avenue, St. Pete Beach, FL 33706
727-363-6100 • www.PropertyLawGroup.com