North Dakota Real Estate Practice: Listings, Sales, Trust Funds, Advertising
Listings, trust funds, and advertising in daily practice
Listing agreements. An open listing lets the owner use several brokers and pays only the procuring broker. An exclusive agency gives one broker the listing but lets the owner sell without paying. An exclusive right to sell pays the broker no matter who sells during the term. The agreement must be in writing, identify the parties and property, state the term and compensation, and address agency and fair housing. Never structure compensation as anything over a stated price; net listings are prohibited.
Procuring cause. The broker whose efforts began an uninterrupted chain of events leading to the sale earns compensation. Watch for scenarios where a buyer contacts a second licensee after the first licensee showed the property.
Trust funds. Earnest money, security deposits, and management funds belong to others. Deposit them promptly into a dedicated trust account, never commingle with operating funds, issue receipts, keep transaction ledgers, reconcile regularly, and disburse only as the contract authorizes or at closing. When the parties dispute earnest money, the broker holds it until a written release from both parties or a court order.
Advertising. Advertising must show the brokerage's licensed name, be truthful, and comply with fair housing; team names and social media posts are covered. Licensees are responsible for ads placed by their unlicensed assistants. Respect Do Not Call and CAN-SPAM rules.
Worked example: A buyer deposits $5,000; the inspection contingency fails and the seller demands the money. The listing broker keeps the funds in trust, releases nothing without a signed release from the buyer or a court order, and documents every communication.
Trap: assuming the seller automatically keeps earnest money when a buyer walks. The contract's remedy clause, not the broker's preference, decides who gets it.