The seller signed a listing agreement with the listing broker. During the term of the listing agreement the listing broker presented an offer on the AAR Contract from a buyer for $10,000 more than the list price. Is the seller required to accept this offer for $10,000 more than the list price? Is the seller obligated to pay a listing commission to the listing broker?


First, the listing by a seller of real property in the Multiple Listing Service, in a newspaper, or in any other form of advertising is generally only an “offer to make an offer.” In other words, the listing is only an offer by the seller for potential buyers to make an offer, and the seller is not required to sell at list price or even at more than list price. Second, a listing broker is entitled to receive the listing commission under listing agreements such as the ARMLS listing agreement if the listing broker (a) produces a ready, willing, and able buyer with no material contingencies, and (b) either the buyer’s offer is equal to or greater than the list price, or the seller and the buyer agree on a sales price lower than the list price. See Nationwide Resources Corp. v. Ngai, 129 Ariz. 226, 630 P.2d 49 (Ariz. App. 1981). Standard material contingencies include financing, appraisal, and inspections. Therefore, a listing broker is generally entitled to a commission only when the standard material contingencies in the AAR contract are either not in the contract, (e.g., cash sale with no inspections,) or are removed during the escrow period.

Note: The seller and the listing broker can agree to different requirements for the payment of the listing commission. For example, many commercial listing agreements provide that no commission is owed to the listing broker unless the transaction closes.

Arizona REALTOR® Digest March 2006