REAL ESTATE BROKERAGE Version 1pauline - XLSB

REAL ESTATE BROKERAGE
Real Estate Broker generally any person acting for another in buying or selling
real property for a fee or in the
expectation of a fee or commission.
As defined by MO #39 A real estate broker is any peron, natural or juridical who is
an agent for another person and for on in expectation of a
fee, commision or other valuable consideration, shall
perform any of the following acts; offers, advertises, solicits,
list, promotes, mediates, negotiates, or effects of the
meeting of the minds on the sale, purchase, exchange,
mortgage or iease of, or joint venture or other transactions
in real estate or any interest therein.
A real estate salesman is a natural person who performs for

and in behalf of a real estate broker under whom he is
licensed, any of the functions of a real estate broker, for on
in expectation of a share in the commission, fee,
compensation or other valuable consideration.
Listing a contract between a property owner and a real estate broker

where the property owner authorizes the real estate broker
to sell or lease or mortgage or exchange of the former's
property, as the cause maybe, with in a certain period of
time, at a certain price an terms, and a certin fee or
commission.
DUTIES OF A BROKER TO HIS PRINCIPAL
1 The broker must be loyal to his or her principal.

All relevant information within the knowledge of the broker
should not be witheld from the owner. The broker should
advise the principal on anything that concerns the principal's
interest.
2 The broker acts a fiduciary.

The broker should never hold any interest not beneficial to
the principal. He is prohibited from buying for himself or
for relatives the seller's property without prior
knowledge of the principal.
3 The broker must account for money deposits.

In serving as an agency, the broker should immediately remit
and account all monies in behalf of the principal such as
deposit or earnest money.
4 The broker must obey the instructions of his or her principal.

The broker should never deviate from the instruction of the
principal most especially on the terms of payment. If the
seller requires a cash down payment, the broker should
accept nothing but cash form the buyer. If he accepts a
check then he violates the instructions of the buyer.
5 The broker must act in person.

A seller employs a broker based on his confidence and
reputation of the broker. He relies on the personal services
of the broker thus a broker should never delegate his task to
others.
6 The broker must not have a personal interest in the property for which
he or she acts as broker without full disclosure to the principal.
7 The broker is prohibited from acting for both the buyer and the
seller without full disclosure.
On rare occasions that the broker need to represent both the
buyer and the seller and collect a commission from both
parties there should be full disclosure to both and both
should give their consent. Without disclosure, the broker
is in violation of his or her agency if he or she accepts a
commission from the principal and third persons.
DUTIES TO THE PROSPECTS
Common observation of the role of real estate brokers suggests that

the broker works diligently with the prospects in satisfying his or her
needs. In this respect, the broker does not earn a commission unless
the prospect is satisfied; a property must be found that suits the buyer
and that may be financed within limitations of the buyer's income
and cash reseves.
In pursuing this objective, the broker must not make any

misrepresentations or false promises or commit any fraudulent act.
Although the broker may promote the property by such statements as
prices are going up, or this house is constructed of only the best-quality
materials. He should not make promises or false statements which
the buyer may rely on. If the broker states that "I can sell this land for
P 500 per square meter more next year," this is a false promise; and
it is in violation of his duties to the prospect.
STEPS FOR SECURING LISTING
1 Contracting owner-seller.
2 Inspection of property for details necessary for selling (location, size,
improvement utilities, etc..)
3 Determine reasonableness of seller's asking asking price talking into
consideration the following:
a) Character of the neighborhood where the
property is located.
b) Favorable and unfavorable physical features of the
property which may affect its price.
c) Market data on nearby or comparable properties
as obtained from registered sales, offering in the
Multiple Listing Service, advertisment, etc.
4 Examination of titles and other documents as to liens, encumbrances,
restrictions, and iformation which may affect salability and
value of the property.
5 Formalizing of listing contract.
6 Prepare selling presentation whivh include plans, pictures, maps, etc.
INFORMATION TO BE INCLUDED IN A LISTING AGREEMENT
1 The names and appropriate signatures of the parties of the contract.

2 A legal description of the real estate listed with a street if applicable.
3 The terms of sale: the sale price and financing terms acceptable to the
seller, such as the seller's willingness to accept a second mortgage or a
purchase money mortgage as partial payment. The remaining balance
of outstanding mortgages, with their terms as of the date of listing,
should be stated.
4 A beginning and ending date of the listing agreement.
5 The nature of the listing agreement, for example, the right of the seller
to list with other brokers or the right of the seller to sell the property
personally without payment of a commission.
6 The agreement to pay a stated commission and its basis.
7 Description of personal properties included in the sale such as
home appliances.
TYPES OF LISTING AGREEMENTS
A. AS TO EXCLUSIVENESS
1 OPEN LISTINGS.
The open listing gives the seller the right to list the property with
competing brokers or sell the property personally without liability
for a commission. Some sellers believe that an open listing best serves
their interest - that listing with ten brokers produces more prospects
than does a single listing.
` Disadvantage
1 Owner may be subjected to commission claims by
more than one broker.
2 Brokers are not willing to spend time and effort on
the property because it might be sold without
notice by another.
2 EXCLUSIVE AGENCY.
Sellers agrees to list the property to only one broker during the listing
period but retaining the right to sell his own property without
need to pay commission to the broker.
3 EXCLUSIVE RIGHT OR AUTHORITY TO SELL.

The Real Estate broker is granted an exclusive right to sell property
during the listing term or period and a commission is paid even if the
property is sold by the owner himself.
Advantage
1 Brokers are more willing to spend for advertising
and slaes effort.
B. AS TO FEE
1 NET LISTING.
Seller sets a minimum acceptable selling price. The broker have to add
his commission (over price) to the set net price as part of the sales price.
2 PERCENTAGE LISTING.
The seller and broker agrees to a certain percentage of the selling price
as commission.
HOLDOVER CLAUSE
Safety clause period: The agency or authority usually stipulates that if
the property is sold within a certain period after the lapse of the
original agency to a buyer to whom the property was offered with
notification to the owner during the period of original agency, the
broker will be entitled to the commission.
MULTIPLE LISTING
The multiple listing combine the features of the open listing and the
Exclusive right to sell agreement. The seller agrees that the property
will be submitted to a multiple listing group, the members of which are
furnished the details of the listed property. When sold, the broker who
originated the listing shares the commission with the selling broker.
TERMINATION OF A LISTING AGREEMENT
1 Sale of property
2 Events that prevents performance
ex. Death of the principal or destruction of the property
3 By mutual agreement or consent of the parties
4 By revocation
If the owner/seller cancels the listings agreement before the expiration

date, the broker is entitled to compensation for the time and
money expanded in exercising the agency.
Or if the Broker has completed the agency assignment with a ready,

willing and able buyer, the owner cannot cancel the agreement
to avoid payment of a commission.
5 By expiration of the period for which the agency was constituted.
REQUIREMENTS TO BE ENTITLED TO A COMMISSION

1 The broker must be procuring cause of the sale.
2 The broker must hold a valid license as real estate broker issued by
the DTI.
3 The broker must prove employment.
4 The broker must meet the purpose of the agency - to find a willing and
qualified buyer who is agreeable to the terms of the seller.
SOURCES OF LISTINGS
1 Acquired assets of Commercial Banks and Government financial
institutions
2 Advertisments
3 Multi-Listings
4 Other Brokers
5 Developers
6 Personal Contacts
IDENTIFYING PROSPECT
PROSPECT person who is in need and qualified to buy lease, exchange

or mortgage real estate.
"SUSPECT" one who is willing but without capacity to buy or with ability
to buy but without willingness.
FUTURE PROSPECT one with willingness but without ability to buy but may
improve his qualification to buy.
STEPS IN CLOSING A REAL ESTATE TRANSACTION

a) Securing Listings
b) Securing Prospects
c) Presentation and Demonstration
d) Negotiation
e) Closing

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What are the different types of listing agreements?

What are the different types of listing agreements?

What are the requirements for a broker to be entitled to a commission?

What are the requirements for a broker to be entitled to a commission?

REAL ESTATE BROKERAGE

A real estate salesman is a natural person who performs for

Listing a contract between a property owner and a real estate broker

DUTIES OF A BROKER TO HIS PRINCIPAL

1 The broker must be loyal to his or her principal.

2 The broker acts a fiduciary.

3 The broker must account for money deposits.

4 The broker must obey the instructions of his or her principal.

5 The broker must act in person.

DUTIES TO THE PROSPECTS

Common observation of the role of real estate brokers suggests that

In pursuing this objective, the broker must not make any

STEPS FOR SECURING LISTING

INFORMATION TO BE INCLUDED IN A LISTING AGREEMENT

1 The names and appropriate signatures of the parties of the contract.

TYPES OF LISTING AGREEMENTS

3 EXCLUSIVE RIGHT OR AUTHORITY TO SELL.

TERMINATION OF A LISTING AGREEMENT

If the owner/seller cancels the listings agreement before the expiration

Or if the Broker has completed the agency assignment with a ready,

5 By expiration of the period for which the agency was constituted.

REQUIREMENTS TO BE ENTITLED TO A COMMISSION

PROSPECT person who is in need and qualified to buy lease, exchange

STEPS IN CLOSING A REAL ESTATE TRANSACTION

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