Guidelines for completing the NC listing contract

Lets face it real estate transactions can be a little complicated. We’ll guide you through it all the way.

Let’s go over some guidelines for completing the listing contract. Specifically, we’ll discuss what’s included in the residential exclusive right to sell listing agreement created and published by the North Carolina Association of REALTORS® Exclusive Right To Sell Listing Agreement (Standard Form 101).

Basic Best Practices

• These are the basic, bare minimum things that all brokers and seller/s should do when completing the listing contract:
• Make sure to fill in the form legibly. Typing is best, but if the form can’t be completed on a computer, brokers should print legibly in ink.
• Always check (and double check) that all blank spaces have been filled in on the form, even if they’re filled in with “N/A” or “none”.
• Use complete and precise responses. This means avoiding any abbreviations, acronyms, and jargon that isn’t clear and concise.
• If brokers or seller/s make any changes (additions or deletions) to the contract, each change should be initialed and dated by both the agent and the seller.
• All pages should be initialed by the agent and the seller/s as indicated on the bottom of each page.
• Our brokers may NOT provide any legal advice (unless they’re also licensed attorneys), as this would be considered the unauthorized practice of law. Sellers should consult with an attorney if they have any legal questions about the contract.

Additional Tips and Guidelines

Names of Seller and Firm

Make sure that we have complete names of each seller/s are included in the contract. For example, if the sellers are a couple, make sure that each person’s full name is listed (e.g., Annie A. Smithy and Ryan B. Smithy rather than Mr. and Mrs. Smithy).
We will enter legal the name of our firm. The firm is representing the client, and the agreement is between the firm and the sellers.

Term of Agreement

It’s not just important, it’s required that the listing contract contain specific start and end dates. There’s no rule that limits the period of time that the agreement can be in effect, but it should be reasonable given the agreement’s objective (i.e., to sell the property to a willing and able buyer). Brokers shouldn’t include any automatic renewal or prior notice provisions in the contract. Any agreement to amend or extend the listing period must be in writing to be enforceable. Using the NC REALTORS® Standard Form 710 – Agency Agreement Renewal and/or Amendment is preferable to striking through terms on the original listing agreement.

• Property Information
  When completing the section about the seller’s property, we need to ensure that the property’s street address is listed, NOT the mailing address (if it is different from the street address). Make sure the address is complete, including the city, zip code, and country.
• In addition to the street address, a legal description must be provided, such as a recorded plat (map), PIN/PID or other identification number, or another description or survey of the property.
• Consult with an attorney to determine what information is necessary for a complete legal property description.
• If known, also provide information about where to find the recorded deed to the property, which should be located in the office of the register of deeds.

Fixtures and Exclusions

This section of the listing agreement is extremely important because it provides detailed information on what items will be included with the property sale. We have to make sure that we as brokers and any and all sellers all understand that this is the time to decide which items the seller will take and which will stay with the property after it’s sold.

This is also the place to list any items that the seller doesn’t own or is currently leasing.

Fixtures and Exclusions

Home Warranty

Indicate whether the seller will or will not agree to obtain a one-year home warranty. If the seller will get a home warranty, write the maximum amount the seller will pay, as well as any fee the home warranty company will pay to the brokerage firm for its assistance. If the seller won’t obtain a home warranty, write “N/A” in the blanks provided.

Listing Price

Here we write in the price at which the seller has decided to list the property. Check the appropriate boxes to indicate which payment terms the seller agrees to (e.g., cash, conventional loan, etc.)

Firm’s Compensation

Compensation for the firm can be paid as a set dollar amount, a percentage of the purchase price, or any other method that is agreed upon by the seller and the firm. Entering a protection period into the contract also protects the firm from losing compensation rights immediately after the contract terminates.

Broker Natasha and seller Trent agreed to a 30-day protection period in their listing agreement. After six months, their agreement term ended, and Trent sold his property to a buyer the following week. Since the property sold during the protection period, Natasha’s firm was still entitled to a commission.

**The protection period provision doesn’t apply if the seller enters into another listing agreement with another firm during the protection period.

Cooperation with/Compensation to Other Firms

Here, you enter the compensation terms for cooperating brokers. For example, if the seller agrees that the listing firm can split the 6% commission with the buyer’s firm 50/50, you’d check the second box and enter “3” in the blank space before “% of the gross sales price.”

Firm’s Duties

This section lists the following duties that the firm owes the seller:
Make best efforts to find a buyer
Disclosure of material offer terms and material facts
Other professional services
Provision of listing agreement to listing service, if applicable.

This section also includes a fair housing statement, as well as a warning against sellers taking buyer “love letters” into account when deciding whether to accept or reject an offer, since the demographic information contained in a love letter may-if it’s the seller’s basis for deciding to accept an offer-constitute a fair housing violation.

Marketing Terms

Make sure to check all applicable boxes in this section, as each box indicates a specific marketing method that the seller has authorized the firm to use in the effort to sell the property. If the box isn’t checked, it’s not an allowed method.

Keep in mind that the “advertising other than on the internet” box being checked doesn’t provide authorization to other firms to advertise the property. Other firms can only market the property as permitted by the firm with which the seller has a listing agreement.

Earnest Money

This section of the listing contract informs the seller about whether or not the listing firm maintains a trust account for holding earnest money deposits (EMDs). It also informs the seller of the parameters for collection, holding, and release of any EMDs associated with the transaction, and that the escrow agent that will hold the EMD will be named in the sales contract.

Seller Representations

This section of the listing contract allows sellers to disclose material facts and defects about the property, as well as information about the seller’s financial situation. Sellers must provide any information about liens against the property, bankruptcy, judgments affecting the property, and Uniform Commercial Code (UCC) fixture filings. While this information might be sensitive or embarrassing for sellers, it’s very important for the firm to be aware of these things, as this information can affect how the property may be marketed and sold. To alleviate any seller concerns about disclosing this information, brokers may let them know that the broker owes the duty of confidentiality and will protect the seller’s interests as much as possible within the boundaries of the law.

Seller’s Duties

• Just like the earlier “Firm’s Duties” section, this section of the listing contract outlines what the seller agrees to do for the firm, including:
• Providing a Residential Property and Owners’ Association Disclosure Statement, Mineral and Oil and Gas Rights Mandatory Disclosure Statement, and Lead-Based Paint or Lead-Based Paint Hazard Addendum (unless exempt)
• Making the property available for showings
• Providing owners’ association documentation (e.g., restrictive covenants, bylaws)
• Referring property inquiries or offers to the firm, and conducting property negotiations through the firm
• Executing and delivering a general warranty deed for the property at closing
• Providing necessary information for the firm to complete a seller’s net sheet

Home Inspections

In addition to material fact disclosures, all sellers should be advised to get a home inspection done in order to properly evaluate the property’s condition. While this is completely optional, brokers should explain that the inspection may benefit the sellers, as it reassures potential buyers and ensures that there will be no unpleasant surprises further down the line.

Brokers should also provide sellers with a copy of NCREC’s brochure titled “Questions and Answers on: Home Inspections,” which can be found on the commission website.

Photographs and Other Materials

This section of the listing contract gives the firm permission to use any and all photos, drawings, videos, advertising copy, and other property information, both before and after the sale. If the property doesn’t sell, the firm may still use the materials after the listing agreement expires.

Additional Terms and Conditions

While real estate agents been told to beware of performing actions that could be considered the unauthorized practice of law, it’s okay to draft additional provisions to the listing contract if needed. However, it’s still a very good idea to be cautious when writing these additional terms and conditions, and take care to use clear and unambiguous language.

Dual Agency

Many real estate firms may or may not offer dual agency ( One firms represents both seller and buyer, but with different agents) to clients. If it does, review all of the information in the listing agreement pertaining to dual agency. Sellers generally provide authorization for the firm to act as a dual agent when the listing agreement is first completed.

There is also an area that allows sellers to authorize the firm to engage in designated agency. This is a separate blank on the form, so agents/brokers should ensure that sellers understand the difference between designated agency and dual agency.

Mediation

If the seller and the firm get into a dispute related to the listing agreement, and cannot negotiate a solution, the parties agree to try to mediate a solution before they seek arbitration, litigation, or other dispute resolution method.

Wire Fraud Warning

Wire fraud is increasingly common in the real estate world, so the listing contract includes a very prominent warning to sellers regarding wire fraud, and steps the seller can take to protect their interests.

Signatures

Once it’s time to sign the contract, all parties to the agreement must be properly named and sign the document. A married seller’s spouse must sign the listing agreement even if the spouse is a recorded owner of the property being sold. Note:

This is because a non-owner spouse holds a potential “marital life estate,” and must sign the deed in order for the other spouse to convey clear title.

In the event that married sellers have an existing prenuptial or postnuptial agreement in place, brokers should consult with an attorney to determine who must sign the listing contract.

Information compiled and presented by:

Dwain Ammons,Realtor®, C2EX, e-PRO®, PSA, SFR®


Marketing Specialist (LMS), Sales Specialist (LSS), Service Expert (LSE), Target Marketing Specialist (TMS), Relocation Specialist (LRS)