Blue Ridge Real Estate

What is involved in the listing of one s property? The listing of property is built around the business relationship of two individuals, the owner of the property and the broker or agent who is attempting to procure a buyer for it. This relationship is created when the property is listed for sale. The listing is an actual contractual agreement between them calling for the broker to perform certain duties and to procure a ready, willing and able buyer, in exchange for which the owner agrees to pay a commission of 5 to 6% of the entire sales price.

The real estate broker or one of his sales staff then becomes your official agent. A fiduciary is another name for your agent, your Realtor, just as would also your lawyer be. The word fiduciary comes from the Latin root for trust (You see that in related words like fidelity-loyalty, or fideism.) If one is truly your agent, you have entrusted him and you have confidence in him. And according to real estate law that makes you his or her principle . So, according to the law of agency, if your agent acts on behalf of your authority, he is also supposed to act according to your best interest in the deal wherein he has been retained.

Industry Standards of Conduct; code of conduct or ethics - Each state has its own canons of professional ethics for real estate licensees. Briefly, a fiduciary relationship entails the following aspects:

• The agent must be obedient to all legal instructions
• This agent should be loyal to the interests of the principle above his own or others. And the agent must never make an offer of the owner s property without his full knowledge and consent, or on such terms as the owner has not already agreed.
• The agent must maintain confidentiality where expected
• The agent must disclose all pertinent facts to his principle. So, it is dishonest when the agent or broker fails to make it clear to all parties of the transaction who it is he represents must never receive remuneration from anyone in connection with the owner s property without the full knowledge of this owner. He should never receive monies from another party to the transaction he is agent for. He must never receive a kickback in connection with the owner s property, and he must never accept money from someone because of contracts he has let out on behalf of this owner, or accept money by reason of the owner s payouts.
• The agent must not commingle funds or steal, but keep a strict accounting. Laws again in most states require that a broker have a fiduciary or trust account where he holds client money in a transit sort of way. The important thing here is that none of his own money be ever entered into this account, or this trust money into his account, but the two must be kept strictly separate. He then must account to his client for all such monies, and handling.
• The agent must exercise a reasonable level of expertise and competence

Now when you list your property for sale with a broker he has exclusive rights to represent you in the sale, but he should be a member of the multilist (multiple listing service) which is a network of local Realtors. Make sure that he is such a member before signing with him. If the property is in the multilist you can be sure it has maximum exposure to the market. To get in the multilist organization this Realtor has already pledged to share the commission with any Realtor who can bring a ready, willing and able buyer and the split is already agreed upon as well.

As opposed to having a listing with one broker or agent, then, there is the possibility of having what is known as an open listing . This is mainly an informal agreement that the owner would sell and pay a commission if a Realtor would bring to him a buyer. In that event, before the Realtor does bring forth a prospect, he will obtain a signature from the owner stating exactly that, and maybe referencing the individual he has in mind. Or the agent may simply obtain the signature of the prospect certifying himself as having shown the property.

And contrast these first two with the net listing . This can be either the formal listing agreement or the informal open listing . Either way, there is a peculiar twist to this one: the agreement stipulates that the owner of the property wishes to net a certain price out of the sale of this property and the Realtor would be entitled to anything over and above that price. Such an agreement is fraught with danger for the Realtor, for there is nothing that would prevent the buyer from submitting an offer for the net amount and then the broker is not to be compensated for his efforts at all. The obvious remedy beforehand then for the broker of a net listing is to get a signature before hand from the buyer stipulating that the purchase price must be such and such or that he himself must bay the commission.