Travels through Property Law by Tom Brodersen, Esq.
Many sophisticated 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 reading them through themselves! They are often told they are “standard” agreements and seem to assume that they are therefore “safe.” First of all, there is no such thing as a truly “standard” contract for real estate sales or, especially, listings. Although the Florida Association of Realtors® (now known simply as “Florida Realtors® ”) have their own basic forms, many brokerage companies write their own contracts, with considerable “creative drafting.”
Real estate lawyers always warn that there are many problems that can’t be fully remedied after the agreements have been executed.
So, starting with listing contracts, just what is in those agreements that can come back and hurt the owner?
A listing is a service contract 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).
Most 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 the arbitrator’s 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.
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 mostsellers 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.
In reviewing listing contracts, I normally strike those terms, or at least negotiate a more acceptable form of them.
ANDERSON & BRODERSEN, P.A.,
350 Corey Avenue, St. Pete Beach, FL 33706
(727) 363-6100 • www.PropertyLawGroup.com