Code Talk: Listing Agreements
Editor’s Note: The Code of Ethics turns 100 in 2013, AAR will be celebrating the Code with monthly articles published under the caption, Code Talk, in the Arizona REALTOR® Magazine, discussing the various ways the code governs professional conduct and interaction with the consumer in every day transactions.
This month, we’ll explore how the NATIONAL ASSOCIATION OF REALTORS® Code of Ethics affects the listing agreement. AAR interviewed three brokers with some great advice on creating an effective listing agreement. Overall the biggest takeaway: Take your time.
For most agents, a listing agreement is the first step towards making a sale and each aspect must be perfectly executed. The listing agreement allows REALTORS® to “market, show, enter (unless otherwise informed not to), write the contract and present the contract,” said George Watrous, managing broker with Keller Williams Lifestyle in Phoenix. Pat Leach, a broker with Keller Williams Southern Arizona in Tucson, also agrees adding that the listing agreement “allows you to procure a buyer for the property and holds your fiduciality forever.” And while the importance is clearly evident, sometimes the execution is lacking.
“I tell my agents two things when filling out the listing agreement,” says Watrous. “First, unless it is an either/or situation, never leave a line blank. Second, write at a third-grade level.” Ron Roberts, designated broker, ABR, CRB, CRS, GRI at Dominion Real Estate Partners, LLC in Scottsdale, also agreed with Watrous. “A bad listing agreement is one where you start adding verbiage that creates ambiguities … it is just not necessary.” Agents must also make sure that they are using the right form.
Another thing to note, said Roberts is to “explain the process so your client has realistic expectations and emphasize the importance of having all communications directed to you, their agent.” Leach adds that a listing agreement is not just a “PPP. Put up a sign, put it on MLS and pray it sells.” She says it’s a commitment to doing the right thing for your clients.
Once the Listing Agreement is filled out completely, the next step is to make sure that all additional forms are included. These forms vary from brokerage to brokerage, but here’s a list the brokers who contributed to this article gave us that they require:
- Affidavit of Disclosure
- County Lot Split
- Agency Disclosure (for client)
- Agreement Notice (for short sales)
- ARMLS data input form
- CLUE Report
- Domestic Water Well (if applicable)
- IMAP Tax record
- Lead-Based Paint Form (prior to 1978)
- ER or EA (Exclusive Right to Sell, Exclusive Agency)
- Listing Addendum
- Market Condition Advisory
- MLS printout
At the end of the day, all brokers agreed that a good listing agreement is complete and includes photos and video of the property; is priced well; and holds true the commitment to your clients to make recommendations on the sale of their home.
Jan Steward comments:
Below is an excerpt from Arizona Real Estate: A Professional’s Guide to Law and Practice by K. Michelle Lind, Esq., chief executive officer of the Arizona Association of REALTORS®
“The listing agreement is an employment agreement between the seller and the listing broker. This agreement establishes the duties of the broker and seller, including the terms under which the broker will earn a commission. Some of the common issues included in a listing agreement are:
- the agency relationship between the broker and seller;
- the amount of compensation and when it is earned;
- authorization for the listing broker to cooperate with and compensate cooperating broker;
- permission to disseminate information on the MLS, on the Internet, and in other advertising;
- permission to use a lockbox and access the property;
- a seller cooperation agreement;
- a seller warranty of ability to convey title; and
- dispute resolution.
There are 14 individual multiple listing services in Arizona and each has its own listing agreement form. Thus, the terms in a listing agreement vary dramatically across the state”.
Here are some things to consider:
- Does the listing agreement touch upon any of the following Articles in the Code of Ethics? Articles 1-9: Duties to Clients and Customers.
- What about Duties to the Public, Articles 10-14?
- What about Articles 15-17: Duties to REALTORS®?
I challenge you this month, to review the Code of Ethics and determine which articles you think are relevant to the listing agreement. You are invited to share your opinions by using the comments area below.
I would like to acknowledge our contributors, all of whom are Professional Standards Committee members:
- George Watrous, ABR, CRB, GRI, ePRO, AHWD, MRE, managing broker, Keller Williams Lifestyle, Phoenix
- Ron Roberts, designated broker, Dominion Real Estate Partners, LLC, Scottsdale
- Pat Leach, associate broker, Keller Williams Southern Arizona, Tucson
- Carol Anne Warren, associate broker, Arizona Adobe Realty Group, Cottonwood (February 2013, Arizona REALTOR® Magazine)