A Listing Agreement is a document which lays out the contractual terms between the seller and the agent (brokerage) who will be listing the property.
Who pays the buyer’s agent (Brokerage)?
The seller is responsible for paying commission for both the listing brokerage and the buyer’s brokerage. Commissions are paid at closing, out of the proceeds of the sale of your home.
A holdover clause protects the brokerage and states that if you enter into an agreement of purchase and sale with anyone who was introduced to the property from any source whatsoever during the listing period, within a specified time written in the “holdover period” after the expiration of the contract, you may still need to pay commission to the brokerage. Let’s say you signed a listing agreement with a brokerage, and your home was shown or introduced to buyers but didn’t sell by the time the listing expired. Iff you then choose to sell privately, during "the holdover period" to someone who had seen the property while it was listed, you could still owe commission to the original listing brokerage. Typically, if you list with another brokerage at an equal or higher commission amount, then the commission amount owing does not apply.
This means that the buyer has placed one or more conditions on the purchase. The buyer is still submitting a deposit along with the offer, there are certain stipulations within the offer that, unless they are satisfied by the agreed-upon date, the deposit can be returned to the buyer without any further action. The buyer can back out of the deal with a mutual release.
An offer, Agreement of Purchase and Sale is registered at the listing brokerage by the buyer’s sales representative, on behalf of a buyer. Offer presentations can take place either at your home or at our brokerage. It can also be emailed or faxed if preferred, where it can present it to you without the buyer’s sales representative being present.
A waiver is a form that removes a condition from the Agreement of Purchase and Sale, and fails to state that the condition was fulfilled. It is best to use a Notice of Fulfilment when a condition has been satisfied, rather than removing it using a Waiver.
The Agreement of Purchase and Sale becomes null and void, if the conditions in the agreement are not fulfilled or waived. A mutual release is then signed by all parties, its authorized representatives and brokers, and the full deposit is returned to the buyer without interest, deduction or further action, as written and agreed upon in the conditions.
Sale price: The price offered to you may be different from your original asking price, depending on market conditions, what comparable properties in your neighborhood have sold for or whether you receive multiple offers.
Deposit: The deposit demonstrates the buyer’s commitment to the seller to complete the purchase. It is reassurance that the buyer is acting in good faith. There is no minimum standard amount; however, it’s usually 5% of the purchase price that is then applied towards the purchase price.
Closing (Possession Date): This is the day the title to the property is legally transferred from you to the buyer, and the transfer of funds finalized.
Irrevocability: This is the date that the offer expires. No terms and conditions can be changed in the offer, unless mutually agreed upon in writing.
Title Search Date: This is the last date the buyer’s lawyer has before the property closes, to search the title and make sure there are no problems or issues with the legal ownership of the property.
Inclusions & Exclusions: What the buyer expects you to leave at the house for them, and what you will take with you. Generally, this list is taken directly from what you have already stipulated on the MLS listing for your home, though a buyer might ask for more in the offer.
Conditions: Stipulations in the buyer’s offer that must be satisfied before a deal is legally binding.
Multiple Representation refers to the practice of a single agent, the Listing Brokerage, representing both the buyer and the seller during the real estate transaction. When a brokerage represents both parties, the brokerage must be impartial and protect the interest of both Seller and Buyer. The Listing Brokerage will obtain the seller and buyer’s written consent to represent both parties in the transaction. Sellers considering the use of Multiple Representation should pay particular attention to the difference in responsibilities when a brokerage acts as a representative of both the buyer and the seller during a real estate transaction.
The Listing brokerage shall have the duty of full disclosure to both the seller and buyer, and disclose all factual information about the property that is known to the brokerage, such as market information about comparable properties, and known potential uses for the property to assist the parties to come to their own conclusions.
When a brokerage represents both the buyer and seller, this relationship will be disclosed to both buyer and seller and requires the buyer’s written consent to enter into such an agreement prior to an offer being presented.
The Listing Brokerage must act impartial and cannot disclose the following:
• That the seller may or will accept less than the listed price, unless otherwise instructed by the seller in writing
• That the buyer may or will pay more than the listed price, unless otherwise instructed by the buyer in writing
• The motivation or personal information about either party unless otherwise instructed in writing by the party to which the information applies or which failure to disclose such information would be fraudulent, unlawful, or unethical practice
• The price the buyer should offer or the price the seller should accept
• The listing Brokerage shall not disclose to the buyer any terms of any other offer
A chattel is moveable property. The most common real estate chattels are appliances and curtains. The seller can take all chattels, unless the chattels are otherwise noted as included in the Agreement of Purchase and Sale. Curtains and appliances are the most common inclusions/exclusions.
A fixture is any object firmly fixed in place. The most common fixtures in real estate are appliances (built in dishwasher) and electric lighting fixtures. The most common fixture inclusions/exclusions are electric lighting fixtures, shelving that is attached to a wall, drapery brackets, and mirror that has been glued to a wall.
The terms 'representations' and 'warranties' are assurances from the seller to the buyer. A representation is defined as an account or statement of facts, allegations or arguments. When a seller warrants something in an Agreement of Purchase and Sale, they're promising that it is free of defects and will repair or replace it if found otherwise, for a specified amount of time into the future. The warranty obligates the seller to the terms of the contract. A buyer may request a warranty (promise) from the seller that the fixtures and chattels will be in good working order on the date of completion, free and clear of any encumbrances (liens). The seller may also refuse and instead, demand the buyer include them in the Agreement of Purchase and on an “as-is” basis with no warranty whatsoever.
Rental items, such as hot water tanks, are excluded from a sale because a seller has no right to sell them. The buyer must agree to assume the rental contract(s) and fees.
When a furnace and AC is rented, the seller can find themselves in a bind and the final sale price may be less than what they expected, because these companies can put a lien on the house equal to the original value of the system and the seller is often left to settle up.
A title search is the process normally performed on a purchase of real property, by the buyer’s lawyer, primarily to ensure that a seller has the right to sell or transfer a property. It provides information regarding any restrictions or allowances pertaining to the use of the land, such as real covenants or easements. If any liens exist on the property, they need to be discharged at closing, such as mortgages, municipal tax arrears or mechanic's (contractor) liens. This search is completed prior to closing and before the Requisition Date included in the Agreement of Purchase and Sale