Listing Contract Clauses

Follows are ideas that might improve your listing contract. They are not intended to be comprehensive or replace the advice of legal counsel (which we do recommend that you obtain). This clause may be added together as an addendum or separately to your contract. Please consult a lawyer before inserting any of these clauses into your listing contract. CAARE assumes no responsibility for the use or misuse of these ideas.   Please hire an attorney!

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Don’t forget to look at our Consumer Friendly Listing Contract too (click here)!

Click here to learn how to negotiate the listing broker’s commission.

Clauses (notes on each clause at bottom of page) and

(for a PDF of these Clauses click here):  

1. The following clauses take precedence and supersede any conflicting terms that exist in the listing contract that You provided to me.

2.You shall NOT engage in a dual agency or designated agency (also called multiple representation arrangements) – both are conflictive relationships that are harmful to the client and obstruct the purpose of this contract. You WILL NOT ask me to sign any multiple representation consent forms. Any written multiple representation consent forms that you have gotten me to sign WILL NOT be used as evidence against me to show that I gave my informed consent to multiple representations. If a multiple representation situations arises, you will refer the buyer to another broker and continue to represent only me in my transaction (called Single Agency). This Agreement will take precedence over all multiple representation consent forms including those executed subsequent to this Agreement. Your duties to me shall survive this contract and the closing of this property.

3. The broker will place a professional picture advertisement in the MLS with _______ hours (not to exceed 24 hours) of signing this Agreement and in other websites as follows: zillow.com, Realtor.com, Trulia.com, Yahoo!RealEstate, MSN Real Estate, craigslist.com, Neighborcity.com and others:_______________________________________________________________. You will conduct aggressive advertising and marketing as described in the attached Marketing Addendum that you will create and attach to this Agreement prior to signing.

4. If the Licensee/Salesperson leaves the Brokerage Firm, I have the option of immediately terminating this contract.

5. You (broker) or I (Seller) will pay the buyer or the buyer’s broker (buyer’s choice) ________ % of the purchase price or $__________ as a flat fee  (strike payment method not used).  If I pay this money, then your compensation will be reduced by the amount that I pay. If this money is paid to the buyer, then this money must be disclosed to the buyer’s lender and the money may be used by the buyer to pay for compensation to Buyer’s Broker, closing costs or to reduce the purchase price of the house or other uses. This compensation will be advertised as an offer of compensation to the Buyer Broker in the MLS and to the public in the Public Remarks section of the MLS and all other advertisements in which you exhibit My property (You will use the below disclosure).  The Following Disclosure Will Be Used in the Public Remarks section of the MLS and all other advertisements in which You exhibit My property: “Disclosure: The Listing Broker and Seller offer the following compensation to buyer brokers or buyers upon a successful closing of the transaction. $______%.” (Fill in the amount).

6. I will pay You, the broker (it is illegal to pay the salesperson directly) (PICK ONE)  __________ % of the purchase price OR $______________ as a flat fee (strike payment method not used).  Compensation will be payable upon the full performance of Your duties and after a successful closing of the transaction and sale of the property.   I do NOT agree to pay any Administrative Fee or extra fees or commissions to you other than as stated above.   

7.     You will place a professional picture advertisement in the MLS with _______ hours (not to exceed 24 hours) of signing this Agreement and in other websites as follows: zillow.com, Realtor.com, Trulia.com, Yahoo!RealEstate, MSN Real Estate, craigslist.com, Neighborcity.com and others:_______________________________________________________________.  You will conduct aggressive advertising and marketing as described in the attached Marketing Addendum that you will create and attach to this Agreement prior to signing. 

8. I own all pictures (even if you take them or hire someone else to take them), data and information regarding the Property.  You (broker) will not claim a copyright on any of this information and will encourage others to freely use this data to market the Property.

9.  You (broker) will not recommend to me any ancillary or affiliated services or products like appraisal, title insurance, closing, legal, home inspection, home warranty or other services.  Instead, if you feel such services or products are of benefit to me, you will diligently research third-party providers on my behalf and make recommendations to me of providers that are not affiliated with your firm or you.

10. You (broker) will NOT hold open houses.  Open houses are a proven ineffective seller marketing tool and put my property at risk to thieves and other security problems.

11.You (broker) will not attempt to place a lien on my title or my proceeds in order to collect your compensation. You will not have nor seek an assignment of the sales proceeds to secure payment of your compensation.

12. You (broker) are NOT authorized to collect or pay any referral fees in my transaction or receive any other compensation offered to you (Broker or Agent) by anyone else related to this transaction unless such fees are immediately disclosed, collected and paid to Me.

13. You (broker) will NOT ask me to sign an Arbitration or Mediation Agreement with You or the buyer. You will NOT provide me legal advice on this topic.

14. You (broker) will be present for all showings of my property. You will not allow other brokers to visit my property unaccompanied.  You will make sure that whoever is present at showings is familiar with the selling points of my property and is appropriately licensed.

15.    You are not authorized to receive any other forms of compensation other than the one commission or flat fee described above. For example, neither you nor any of your affiliates, shall collect any fees for filling out a home warranty application, selling me title insurance or referrals. If you violate this clause and disobey these directions, you agree that such action will constitute self-dealing and that at a minimum you agree to forfeit your entire fee.

16. You agree to verify the lot dimensions and square footage measurements (of building and rooms) prior to marketing my property.


Notes on Clauses:

1.     Prior to inserting any of these clauses, you will likely want to make sure that these clauses take precedence over conflicting terms in the contract.  Again, please do verify this with a local attorney.

2.     The most effective advertising of listings is now through third party websites like Zillow.com, Realtor.com, Trulia.com, Yahoo! Real Estate, MSN Real Estate, Neighborcity.com. These sites are the most frequented by buyers. Some brokerages intentionally withhold listings from these sites in hopes of increasing their chances of collecting a double commission (happens in dual agency and designated agency transactions). Also, some brokerages limit the market exposure of your property by first only making the property available to agents at their firm. They actually market this as a “service.”

3. In an effort to stop perceived competition, some brokers through their MLS’s are placing copyrights on seller data. They attempt to own the rights to your property data.

4.     Most listing contracts obligate you to stay with the brokerage firm even if your agent moves to another firm.   

5.     The Listing Broker shares their compensation with buyer brokers through the Multiple Listing Service and this amount is not visible to consumers.  Most listing contracts leave this important term out of the contract. In addition, most listing brokers only offer this amount to other brokers and do not make this amount available to buyers representing themselves (which may deter buyers who want to represent themselves). This shared amount should be determined by the Seller, not the Listing Broker, and should be disclosed and offered to the buyer.   Note: 10 states  prohibit brokers from sharing their fee with buyers (click here for a list of those states).  

6.     Many brokers insert a clause into the boilerplate of their listing contracts that calls for an added fee to be paid to them. It is often called an Administrative Fee or some other fee and can often exceed $300. Brokers who refuse to waive this fee should be avoided.  Also, many brokers call for their fee to be due and payable upon procuring a ready, willing and able buyer (even if the transaction does not close).   

7.      The most effective advertising of listings is now through third party websites like Zillow.com, Realtor.com, Trulia.com, Yahoo! Real Estate, MSN Real Estate, Neighborcity.com.   These sites are the most frequented by buyers.  Some brokerages intentionally withhold listings from these sites in hopes of increasing their chances of collecting a double commission (happens in dual agency and designated agency transactions).   Also, some brokerages limit the market exposure of your property by first only making the property available to agents at their firm.  They actually market this as a “service.”  

8.     In an effort to stop perceived competition, some brokers through their MLS’s are placing copyrights on seller data. They attempt to own the rights to your property data.

9.In an effort to “capture” all aspects of your business, many brokerage firms have created ownership interests in safeguard services.  Brokerage firms have a large financial interest in making sure your transaction closes and have created these affiliations to compromise those safeguards and eliminate pricing competition.  It is important to the integrity of the transaction that safeguard services like appraisal, title, legal, home inspection and other services are not affiliated with your brokerage firm or your agent.

10. Open houses are known to be security risks to sellers and proven not to sell houses.  Rather, they are used to find buyer clients to buy other houses.

11.   Some listing contracts allow the broker to place a lien on your property in order to secure their compensation.  This can interfere with your closing and give the broker an unfair negotiating position.

12.   Brokers routinely pay secret referral fees to other brokers who send them buyers or sellers.  These fees are rarely agreed to by consumers and affect your ability to negotiate a fee reduction.

13.   Many brokers “advise” their clients to sign an Arbitration Agreement that often severely impacts your rights.  Just like the rest of these clauses, seek competent legal advice from attorneys only.

14. When other brokers visit your property it is vital that your broker be present to supervise the visit to avoid loss and damage. In addition, your broker/agent is the most familiar with your property and should be present to help point out the advantages of your property. 

We hope to add to this list soon as this list is by no means complete.  Stay tuned!

Suggested donation for use of these ideas is $25.   We really appreciate your help!