Listing and Buyer Representation Agreements
What this domain tests
This domain tests the content, execution, and enforcement of the two core contracts in residential practice: the listing agreement and the buyer representation agreement. Expect questions on term, commission, holdover, exclusivity, and the disclosures that must accompany signing.
Core rules and concepts
- Listing agreement: identifies the seller and brokerage, the property, the list price, the term, the commission and how it is shared with a cooperating brokerage, and the services provided. It may be exclusive, exclusive with a specified exception, or open.
- Buyer representation agreement: defines the geographic area and property type, the term, the commission and who pays it, and whether it is exclusive. It should state that the buyer may owe commission if the seller does not pay.
- Holdover clauses entitle the brokerage to commission if the property sells to a buyer introduced during the term, within a stated period after expiry.
- Commission is negotiable and must be clearly stated; the agreement should specify whether commission is payable if the seller sells privately or the buyer purchases without the salesperson.
- Disclosure and copies: the client must receive a copy, and required consumer disclosures (agency, commission, and the nature of the relationship) must be provided before or at signing.
- Amendments to price or term should be in writing and signed.
Worked example
A 90-day exclusive buyer representation agreement expires. Two weeks later the buyer purchases a home that the salesperson showed them during the term. The agreement has a 120-day holdover clause.
Reasoning: the holdover clause applies because the buyer was introduced to the property during the term and purchased within the holdover period. The brokerage is entitled to commission as the agreement specifies. The mark is lost by answering "the agreement expired, so no commission" without addressing the holdover. Note the counterpoint: if the buyer had first learned of the property independently and the agreement's holdover is limited to properties the brokerage introduced, the analysis changes.
Traps that cost marks
- Ignoring holdover clauses and answering only on expiry.
- Assuming commission rates are fixed by regulation - they are negotiable.
- Forgetting that a buyer may owe commission when the seller offers none or too little.
- Treating an oral amendment to the list price as binding when the agreement requires writing.
- Missing that the geographic area and property type limit the buyer agreement's scope.