A real estate broker is a real estate broker who acts as an agent for both the buyer and seller of property. In most cases, the seller retains the broker and works with the buyer. The broker works for the seller to solicit potential buyers. The seller then evaluates the proposed offers and determines if an offer is in their best interest. The broker is required to be licensed by a state regulatory agency.
What is a listing agreement?
A listing agreement is an employment contract between the seller and the broker. The listing agreement generally authorizes the broker to show the property to potential buyers.
There are two types of listing agreements:
- Open Listing – A broker earns a commission only if the broker successfully sells the real estate; however, if someone else introduces the buyer, the real estate broker is not entitled to a commission
- Exclusive Listing – A broker is entitled to a commission even when someone else sells the property.
When can a broker collect his commission?
Most listing agreements allow a broker to charge a commission when they introduce a buyer. This means, when a person can pay the purchase price and is also ready and willing. The buyer must be able to execute the contract by showing that he has the money available to purchase the property.
What happens if a seller does not accept the buyer’s offer?
If a prospective buyer makes an offer that satisfies the terms of the agreement, a broker has earned his commission even if the buyer refuses to sell. The offer must meet the terms of the listing agreement. A buyer’s offer that is less than the sales price does not entitle the real estate broker to a commission.