05/19/2021
Listing Agreement Case Study
The Selbys decide to sell their home and contact Broker XYZ, of XYZ Realty, to discuss their options. Broker XYZ prepares a competitive market analysis and then meets with the Selbys to explain different listing agreements. The Selbys choose an exclusive agency listing. The agreed-on commission is 5%. The sales price is $450,000. The agreement is signed on May 30. Three days later, broker XYZ posts a “For Sale” sign on the front lawn.
Broker XYZ lists the property on the multiple listing service and offers a 50/50 commission split to a selling broker. Broker XYZ also lists the property on multiple Internet sites and holds an open house the first weekend the home is available. A sales associate in the XYZ office finds the buyer. The home sells for $400,000.
1. What advantages do the Selbys enjoy from the exclusive agency listing? What are the disadvantages?
2. What advantages does broker XYZ enjoy from the exclusive agency listing? What are the disadvantages?
3. What is the effective date of the listing agreement? Why?
4. Who is the procuring cause of the sale? Why?
5. How much is the commission? How much does broker XYZ receive and how much does the sales associate receive?
6. What if broker XYZ had not put up the “For Sale” sign, had not listed the property with the MLS, had not posted the listing on the Internet, had not held an open house, or had not made other efforts to actively sell the property? What recourse would the Selbys have had in this case?
