Overview
This lecture focused on seller agency in real estate, discussing the roles, relationships, types of listing agreements, key duties, and disclosure requirements for listing agents.
Seller Agency Basics
- Seller’s agents (listing agents) represent the seller, not the buyer.
- Seller’s agents seek buyers for their client’s property, while selling agents actually work for buyers.
- Commission is typically 6%, split equally between the listing and buyer’s agents (3% each).
- Listing agreements are between the seller and the broker, not the individual agent.
Listing Agreements & Types
- Express agency: created verbally or in writing; preferred due to clarity.
- Implied agency: created by actions, often accidental; best avoided due to potential liability.
- Exclusive Right to Sell: broker gets paid if property sells, regardless of who finds the buyer.
- Exclusive Agency: broker only gets paid if they or their agents find the buyer; if the seller finds the buyer, no commission is owed.
- Open Listing: multiple brokers can list the property; only the broker who finds the buyer gets paid.
- Net Listing: seller sets a minimum acceptable price; broker keeps anything above that amount (legal in Texas with specific disclosures).
Duties & Responsibilities
- Agents owe sellers fiduciary duties: loyalty, confidentiality, and placing seller’s interests above their own.
- To non-clients (customers), agents owe honesty, fairness, and competency.
- Must avoid misrepresentation and false promises; never guarantee sale outcomes.
- "Ready, willing, and able" buyer: bringing such a buyer generally entitles the agent to commission.
Seller Agency in Practice
- Exclusive seller agency means the agent only represents sellers; buyers are considered customers, not clients.
- In-house sales can incentivize brokerages to keep both sides of commission, sometimes at the expense of fair client service.
- Brokers may act as intermediaries, but only the broker (not agents) can be the intermediary.
Disclosure Requirements
- Agents must disclose: agency relationships, company policies, possible intermediary relationships, and any commission splits.
- Listing agents must not disclose seller’s motivations or confidential information to buyers.
- Material defects or facts affecting property value must always be disclosed.
Key Terms & Definitions
- Listing Agent — Represents the seller in a real estate transaction.
- Express Agency — Agency relationship clearly stated orally or in writing.
- Implied Agency — Agency created by behavior or conduct, not explicit agreement.
- Exclusive Right to Sell — Listing where agent is paid no matter who finds the buyer.
- Exclusive Agency — Agent is only paid if they or their firm find the buyer.
- Open Listing — Multiple agents can try to sell; only the procuring agent is paid.
- Net Listing — Broker receives any amount over the seller’s minimum price.
- Ready, Willing, and Able Buyer — A buyer prepared and qualified to buy on the seller’s terms.
- Fiduciary Duty — Legal obligation to act in the best interest of the client.
Action Items / Next Steps
- Review TAR forms and the relevant listing agreement examples in your textbook (see page 98).
- Study material for the finance test tomorrow.
- Complete and submit assignments from previous three classes by Sunday.