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Listing contract
From Wikipedia, the free encyclopedia that anyone can edit
A listing contract is a contract to list some real estate by a real estate agency (or brokerage) as being offered for sale at a given listing price. It is a contract which is agreed to and signed by a real estate agent/broker and the owner(s) of the property (real estate) who want(s) to sell it. The contract is often referred to as a listing agreement. Upon listing the property, the real estate agency tries to get (or find) a buyer for the property. In consideration of the brokerage successfully finding a satisfactory buyer for the property, a real estate broker anticipates receiving a commission (fee) for the service the brokerage provided.
Commission
Although the terms of the contract could vary, usually the payment of a commission to the brokerage is contingent upon:
- * the successful negotiation of a purchase contract between a satisfactory buyer and seller and the subsequent ability and willingness of the buyer to close the deal, or
- * finding a satisfactory buyer who is ready, willing, and able to pay the full listing price (or more) for the real estate for sale without any contingencies.
If the seller refuses to sell the real estate when one of the above two conditions applies, it is typically considered that the real estate agent has done his job of finding a satisfactory buyer and the seller must still pay the commission, although the details are determined by the listing contract. If the buyer cannot or does not buy the property, then the brokerage has not yet done its job and the seller does not yet owe the broker a commission.
The commission is usually a percentage of the sales price of the property ranging from perhaps a couple percent to about 10 percent, but usually in the range of about 3 - 7 percent for houses. The commission could also be a flat fee or some combination of flat fee and percentage, particularly in the case of lower-priced properties, vacant lots, or other unusual real estate. Again, the details are typically determined by the listing contract. The commission is paid by the seller to the listing real estate broker, who will compensate his/her listing agent and any other brokers/agents from this commission by a separate agreement with them.
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