Listing, Buyer Representation, and Sales Contracts
Listing agreements and contract formation
A listing agreement should state the parties, the property, the price, the term, the commission, the type of authority (exclusive right to sell, exclusive agency, or open listing) and any termination provisions. Bermuda practice uses written memoranda of agreement or offer-and-acceptance documents; whichever form is used, the essentials are parties, property description, price, and signature. Candidates must understand conditional contracts, deposits held in trust, and the standard conditions covering title, survey, planning permission and financing.
Traps to watch
Questions test whether a commission is payable when the owner sells to a buyer introduced by the agent during the listing term, and whether it remains payable after expiry where the agent's introduction was the effective cause of the sale. Another trap is the counter-offer, which kills the original offer. Watch for the buyer who signs "subject to contract" and then claims a binding deal - the question is whether all essential terms were agreed and whether the parties intended to be bound. Also check deposit handling: deposits should be held in a trust or stakeholder account, not the agent's operating account.
Rule of thumb
The agent earns commission when they are the effective cause of the transaction, not merely when they were involved at some point.
Worked example
An exclusive agency listing expires on 1 June. The buyer first introduced by the agent signs on 15 June. Because the agent's introduction was the effective cause and the listing contained a protective clause, commission is payable.