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okay thank you for joining me this morning today we are going to be going over listing agreements the various formats of the listing agreement itself Florida Realtors has pre-approved and standardized a few different formats of the listing agreement that we can go ahead and use both for sale and for rental listings we will start on these sale listings itself and kind of go through writing one and some of the major clauses that will be important to have a good working knowledge of when you're going through these forms and documents with your customer so initially we'll start off with what I consider to be the most standard version of the sale listing agreement which you would find under either form simplicity transaction desk dot loop or our paperless pipeline system as the exclusive right of sale listing agreement transaction broker keep in mind that we all start off as transaction brokers in every transaction so it's something that this is by default what you would be utilizing you would use a different format for different types of scenario where you are using for example a a single agent relationship or if you are utilizing a single agent and transition over to a transaction broker it's being recorded so starting off the top the listing agreement itself first will input the sellers name at the top of the page which is the same for every transaction if you are putting pulling your information from for simplicity or transaction desk or dot Lube for that matter the sellers name should automatically be populating from the tax records so it's something that you won't really have to type in it should auto populate for you depending on where you're writing the agreement itself the broker keep in mind is the name of the company the K company realty not your name is the agent if you'd like to you're definitely free to go ahead and after the K company real P putting your name in parenthesis after that as just a matter of record as you authorize this see it for this listing is so that's where your name would go moving down to the next section we're looking at the authority to sell property this is where the start and end dates go into the listing agreement you cannot by any means leave this section blank one of the legal requirements for the validity of a listing agreement is that there must be a defined start date it must be a defined end date to make sure that you are always utilizing this field filling it out you so the next section that we'll go down to is description of the property we haven't hit any section yet that I believe is very important to explain to your customer when we get to those sections I'll make sure I point those out to you but description of property the street address as you can see is the physical address of the property and this auto-populated as I came from the an MLS listing to open this document I'm currently in transaction desk it would populate in the same manner if you're used form simplicity or dot loop or transaction desks the same as I did the street address should populate itself under section 2a line 13 the next line below that is the legal description again Auto populating make sure to include the full legal description not an abbreviated version this one automatically populated from need tax records when pulling the property information so that would work it doesn't need to go into more depth than that as long as you're defining both the street address and the legal description they should match each other in the tax records now where do we go for tax records for your local County go into your property appraisers website should be able to search the address of the property and it will provide you with all the information that you know that you need to know personal property this is an interesting one and this will kind of pertain to what you put into the MLS if I list all appliances like I did here that's perceived to mean that we're conveying the stove the fridge the microwave the dishwasher the washer/dryer the hot water heater everything that's in the house as it is right now but this is a great section where you want to where you could include a full list of the inventory of furniture I spoke with an agent yesterday who had who's taking a listing that's going to include a boat and a jet ski so those are pieces of personal property that may be conveying with the sale you want to make sure you list here and that's going to give you the right to convey that into the MLS as well as a purchase contract when you do have one come in the next section line 19 and 20 section see occupancy keep in mind this is only geared towards if the property is occupied by a tenant by a renter if the owner occupies this you do not need to check off this box the reason this is is here is in the event it is rented out to attendants and you do have a purchase contract come in you need to make sure that you are including the fact that the lease the review of the lease and the documentation as a relates to the tenant are subject to the contract these mean the contract are subject to the tenant information so by checking this off the sellers disclosing to you that there's somebody in there this is when the lease expires it's in writing you know what's going to happen if there's a tenant in here and you do not know in the least term expires get that information because that could kill your deal three months down the road when you get there and the tenant can't move out and the person buying it has an FHA or VA loan and have to move in next section I'm going to speak about this one for just a moment actually so section 3a the price this is obviously going to be the ballistic price that we put on it hey Sharon this is going to be the listing price that we put on the property this is really important you may just think I'll leave the price blank we'll read it in an hour listing appointment that's fine however you need to have a defined price here and the reason that is you are checking off number one the price that the seller would accept and then align below that the terms that the seller would accept now the reason these two fields are important is let's we list this property for 350,000 dollars and the seller can accept a cash deal conventional VA or FHA we're talking single-family home on this one so at 350 we are under the threshold for an FHA loan we're under the threshold for a VA loan they could accept any of these so let's throw this scenario out there I get an offer from a VA approved buyer at three hundred and fifty thousand dollars with a contingency on them selling their own home the seller says no I don't want to wait for them to sell their own home I'm not going to accept that in fact I want to cancel my whole listing agreement guess what the seller owes you your agreed-upon commission eliciting agreement ing to $350,000 ing to Florida Realtors legal legal counsel as soon as you've procured a buyer at the listing desired price with the listing desired term which is only cash conventional VA and FHA right here so if you bring a buyer with 350,000 and any types of those methods of payment for that transaction you've done your job you're done there the actual fiduciary duty as it relates between a seller and a listing broker ends at the point of contract it's unbelievable in today's day and age in today's market most sellers expect the agent to be a full-service agent a full-service broker and take them step by step through but ing to Florida Realtors that's not they that's not the case once you procure your buyer you've done your job it's very weird but it's true and there is case studies there's there's supporting documentation on past cases where brokers have gone off after commissions when a seller did simply did not accept an offer at full price with with one of the acceptable terms now if you're a seller that's a little deceptive and you're not really understanding that in the initial part and that would definitely hurt your relationship between the broker and me and the seller of the property but the way to avoid that would be including a clause all offers and terms subject to sellers approval in the additional terms of listing that would cover the seller so if you're advising a friend of yours listing a property in another state make sure you give them that kind of advice as long as it's at or above full price and ing to one of these financing terms so by checking off all of them you're really saying if I bring you a buyer 350 with whatever I've done my job so typically I would check off as many of them as apply if I know the property is outside of FHA or VA guidelines you know above I believe the threshold now is 363 465 like that for VA and FHA if that's the case I would uncheck those I'm listing a $500,000 property if it's 350 I know I'm automatically going to be inside of all of my thresholds so I'll go ahead and leave those there the next section below that is seller financing line 24 I wouldn't say this is a very common occurrence I haven't seen too many seller financing transactions recently over the last couple years anyways but if that is the case if they're acceptable go ahead and check that one off as well and enlist your terms on the right side so let's say they want to take 50% down and they will balance they will finance 175,000 with the following terms would be 50% down five-year balloon early year amortization I would throw that right there because this is just the basic on what a seller would accept I'm trying to cover myself if I bring in a buyer that will do seller financing at 350 thousand 50 percent down 5-year Balu and 30-year amortization then I've done my job I've earned my compensation but then again this is not very common so you may not be filling this out maybe 1 in 100 transactions ok moving down assumption of existing mortgage I'll take these out since they're not common assumption of existing mortgage now this is even more rare than the seller financing and banks are much much more scrutinized about this now with all of the changes to the mortgage requirements but this essentially is the seller passing on the balance of their mortgage and the payment structure to a buyer always subject to the lenders approval and it doesn't it rarely works out if someone can assume your existing mortgage they might as well go out and get the room at current terms now what you'll see changing over the next five years I spoke with a few mortgage brokers who think that mortgage assumptions are going to take a rise because of the fact that interest rates are increasing and as they increase the assumable mortgage is much more attractive so let's say interest rates right now we can get 375 for four and a quarter in a few years that might be five that might be a 5% interest rate is the average APR if that's the case that difference in a point point the quarter is a big deal on your monthly payment it's a big deal in your final interest so doing an assumable mortgage and going along with the guidelines of the types of mortgages that can be assumed and transferred that could be a very interesting marketing tool I know Chad Reed ling'er from the close of us team was in here talking about different types of mortgage programs that can be assumable I believe there was a method of FHA being assumable and a method of conventional being assumable as well I'm not sure about f8 about VA but those are interesting marketing tools that we can possibly use in the future if you see interest rates taking that steep climb that we're expecting so I No if someone assumes your mortgage you're released from liability and it passes on to the next person essentially taking my name out putting your name it everything else would stay the same it's always subjective credit requirement so it's going to be through the same types of approvals but you're guaranteed with that previous interest rate that was already locked in that moving down line 37 seller expenses this is in the event the seller is going to be paying part of the mortgage points or origination fees or anything like that for the buyer I don't think I've ever seen this film out with anything but zero the seller should never have to pay this this is also a field where you can include if the sellers willing to give a concession so let's say it's a flipper and the flipper puts the house on the market they're trying to make it as affordable as possible while still getting the price so they may sell it for the we listed 350 they may say okay I'll take 350 and give 1% back or I'll take 345 with 0% back you know including that in here gives you that flexibility to hold them to it but then again at our point we want to get as much money as possible for our seller so by offering a percentage can you get a little bit more for them probably the sales price will be a little higher that could be a motivating tactic for selling the property depending on the type of area that you're looking in if you're marketing a property a listing that is in a an area that's primed for FHA buyers taking a percentage increasing your price a little bit and taking that percentage to give back may be a pretty attractive thing to the buyer so this is a section where the sepal is giving a percentage of the purchase price to the buyer certainly could that's that's the thing why would you use this it could be a marketing tactic that's really it so if a property can be hard to difficult the salad maybe wasn't moving maybe you're going after expired listings where they have the price up there and they don't want to drop the price instead of dropping the price offer a percentage to the buyer the different way to kind of tweak things and put it out there line 39 broker obligations it's funny how this is the smallest section of the listing contract broker obligations is only to make diligent and continued efforts to sell the property until a sales contract is pending on the property so we must make diligent effort to sell the property until it goes under contract its oddly enough where our fiduciary responsibilities to the seller ends had a debate about this with one of the legal counsels from Florida Realtors and she insisted I was incorrect that we are not responsible through closing it's actually through contract all right Multiple Listing Service the property will be placed in the Multiple Listing Service it's beneficial to the seller that is just explaining to the seller why the MLS is beneficial and that we will be placing it in there you are required by getting this listing agreement signed to place the property in the MLS every MLS is a little bit different most of them are 48 hours some of them are 72 hours some of them don't even have a requirement they say within a reasonable amount of time so essentially if you do it within two days you're covered if you know you're not going to be placing the property in the MLS within a couple days please add something in the additional term saying when it will be placed or seller agrees that it will not be placed in the MLS so let's say there you're working with someone who is renovating the property and you'll sign your listing now but they want to hold it out for three weeks because they want the print of pictures to come out when it initially comes on the market which is what you want as well you want the proper presentation from the day you go on market so this would be allow you to hold the property off the market but you're disclosing to the seller by placing that in the additional terms that it won't be on the MLS otherwise you're not only violating MLS policies you're also violating the NA our code of ethics so you need to make sure you disclose that so if it will be in summary so will not be Veloz add something in addition terms you here's an example property is going to go on the MLS typos when owner of seller approves to do so to occur within 14 days so within the next two weeks the seller is going to give me authorization to go ahead and put the property in MLS after we've had our pictures done after we've had the property staged whatever the case may be but that is giving you the authority not to place that there okay moving on to the next page at the top the broker is authorizing the excuse me the seller is authorizing the broker to advertise the property as the broker deems advisable don't check either one of these boxes these are opt outs meaning you have the authority to do all of this unless this box is checked okay if you check either one of these boxes that means you have to put that information in the MLS ingly display the property on the internet except the street address that means at the bottom where it says address on internet when you're placing listing in the MLS you can you have to say no now what happens what chain of events occurs after that if you say no to address on internet or display on internet no to either of those the property does not go to realtor com the property does not go to Zillow does not go to Trulia get too many calls with agents saying my listings not on Trulia my listings not on Zillow I go into the listing and they have address on internet as no or they have a VM as know or they have comments or blogging as no you can't say no to any of those items at the bottom of a listing or the listing will not make it there are not needed there they're both they're only needed there if you're going to check this box its disclosing it's making them acknowledge that they understand it will not be placed on the Internet people buyer searching on the internet for listings won't see your property so don't come back to me and say that you don't see your property because you told me no don't ever check those off there's no reason to check it off really no reason okay we're also giving authority to place for sale signs or sold signs in front of the property and use the sellers name in connection with marketing or advertising you're really never going to use a seller's name to market the property but it's giving you the authority to go ahead and place for sale or sold signs riders in front of the house and if you have a listing you should have a sign in front long as you're able to do so with the Association or condo covenants you need to put one out obtain information relating to the present mortgage so this would allow you to contact their two lender and get the information as it relates to a payoff I will tell you from experience the lender is not going to utilize this as Authority for you to get the information on their loan and you really don't need it if you ask the seller what their payoff is or a ballpark understanding so that you know if you're going into a short sale situation or not they should be able to provide you that information right objective comparative market analysis information to potential buyers so essentially if you have a buyer who is looking at the property is looking for evaluation you can be completely impartial and provide information as it relates to comparable properties that have sold in order place a value on that section II we have some more boxes here so this is used other broker authorizations this is where these Fleur is authorizing you to use a lockbox to show and access the property explaining why not to use a lockbox or why to use a lockbox also authorizes you online 64 to either withhold verbal offers or withhold all offers once an offer has been accepted on the property so in this case depending on your business style and practices lock boxes this could apply for a Supra this could apply for a combination lock box if the property is occupied don't put a combination lock box on the property just don't it's going to open yourself up for so many different liabilities if it's a rental transaction which we're not going through right now I might use a lockbox depending if it's vacant or if it's occupied you need to discuss with the seller and see what's going to work out as far as access for the property and what you feel is secure for both the seller and yourself I I don't want to know anything less what well that'll offer is someone an agent calling me to say hey okay my buyer would like it we will offer you 325 all cash closing in two weeks get back to me that's a verbal offer that if you check off withhold verbal offers all offers that you're submitting to the seller must be in writing so if somebody gives you a verbal offer technically you're required to tell the seller hey we got a verbal offer here it is and go back and forth tellers hate verbal offers they hate them there's no validation to it they could say yes and then nothing happens so someone has a benefit of understanding where the mentality of the of the seller is ahead of time so verbal offers I would check that I don't like verbal offers I'm agreement agreement with that now as far as absolutely I can't do anything with verbal offers they're not accepting any please put it in writing and I'd be happy to present the seller and see where we go okay I mean most offers that you get on listings aren't going to be a full asking price the offers you get are going to be within 10 to 20% of the listing price unless it's a really hot area and you're going to have multiple offers coming in then you'll have some within a couple thousand of your listing price and from even over listing price I sold a house in Lake Worth maybe six months ago for a family friend and we listed at 369 I ended up with three offers within the first five days all over listing price it was just it's a hot area that was it which it kind of stumped me because there were two other listings sitting on the market in the neighborhood and they weren't priced far off professional photography does world's I used a cute or last week for another friend remember a cute or four and they did the high-definition photos the virtual tour the matter port tour they did the drone they had community pictures and they even gave me 360 images that I can post on social media you know the nice ones where you go through your newsfeed and it starts moving with your phone because it's pretty nice so they give me a good six of those from different main rooms in the house really solid service it was 287 for that house 1800 square feet pound house yeah definitely worth it for the entire thing inside a very good price and they created a single property website both a branded and an unbranded version so the unbranded on the MLS it's amazing amazing okay going back so if you would like to withhold all offers under listing price let's say you have a seller that says in a circumstance okay we're listing to 350 I don't want to hear anything less than 325 if somebody comes in with less than 325 I don't want to hear about it there's no box in here that you can check off where it would it would apply it so technically if you got an offer less than 325 you still have to present it what you can do in that type of circumstance again come down to additional terms all offers less than 325 thousand will be withheld you don't even tell the seller you tell the buyer's agent I've been instructed not to present any offer lessons 325,000 ing to our listing agreement so bring me something at 325 or higher and I'd be happy to present it if they complain they say there's a violation of code of ethics anything like that this is your defense right here this is a seller authorizing you to do that back up going back X section of office website virtual office websites that's filter common Zillow for the most part these are any websites that place automated valuations of the property and allow members of the public to comment notes like dislike on those websites ing to what described about the property maybe their reviews about viewing it there's a website I believe Zillow does us now where you can go on let's say you looked at a house you can go on there and make a note horrible guests bedroom very dark feeling great kitchen anything like that so other people that are coming in can can take that information to apply to others experiences or from others experiences instead of having to go look and see it for themselves so that's what the comments section is really about so by checking these off these are again opt outs so the first one is a seller telling you can't place it on a website where there's an automated evaluation the second one is you can't place it on a website with any comments or reviews again this these are items on the bottom of the listing when you put them in top one is AVM the bottom one is comments if you say no to any of these they're not going on those affiliate websites so I'd like to skip over that and never have a seller check that off as it inhibits my ability to sell this property in a timely manner seller's obligations seller must obligate with the broker with carrying out everything in this agreement including referring to the broker anybody who contacts them to try and buy the property so by signing this or saying they're not going to sell it on their own if they get someone who comes up knocks on the door and says hey I'd like to buy your house they need to say here's my realtor please call okay if the seller has someone or maybe they've started marketing the property as a for sale by owner prior to listing with you they still are obligated to pass those customers that come back to them over to you the way to get around that and most sellers will want to get around that they may say hey I'm talking to John Smith he looked at my house already he might end up buying it in three months if that's the case include that down here in additional terms as an exclusion well you want to list you want to list the reason being you don't want the seller to continue to market their property come and say hey this guy saw it before we listed I don't have to pay you anything you want to cover that list in the event John Smith pretty simple that's excluding John Smith from your commission um we were here okay line anyone's letter C and form the broker before leasing mortgage or otherwise income burying the property so they will talk to you about it before they go out and rent the property which would obligate the purchaser to a lease contract mortgaging by refinancing their house because it will affect their final payoff and ability to close without being a short sale and otherwise encumbering so placing as collateral for another type of financing a loan on a different property so they need to notify you so you understand if there's going to be anything that's going to inhibit your ability to sell the property without issue no not necessarily because that's not creating a problem with this property per se that's creating an issue for the other one so let's say they put up let's say they're going out and they want to do a one hundred thousand dollar business loan and they're going to place the equity of their house as collateral for it some banks will do that they would need to tell you before that because it is placing a essentially a hold on this property in order for them to take that out okay the seller also agrees to indemnitor harmless and indemnified all broker and agents for losses damages cost and expenses including attorneys fees or liabilities because of the use of a lockbox so let's say someone goes in sues the property damages it it's not our fault that when they were given authorized access it's not our fault okay one e88 perform any act reasonably necessary to comply with FERPA do we all know what FERPA is Burpo for foreign sellers so this is the seller agreeing that they're going to comply with all FERPA regulations and an assist you in getting that closed out I haven't seen too many of those recently I'm surprised with the influx that we had in foreign buyers I would have thought we would see more of those next make all legally required disclosures including all facts that materially affect the property's value and are not readily observable or known by the buyer this would mean disclosing here or and or these sellers disclosure itself any code violations liens issues that they know that may be hidden behind so let's say they know there's a roof leak that's active in the garage and for some reason there's cedar ceilings and you can't see the water that is an unobservable defect that the seller has to disclose there's a stain on the ceiling they really certainly don't have to disclose because it is very observable to the to the to the naked eye okay if there's anything that comes up after the fact the seller will inform you of any facts that change like a code violation they get cited for something a lien a lawsuit foreclosure notice anything like that okay and the seller will also consult appropriate professionals for legal tax property condition environmental foreign reporting requirements and other specialized advice because that is outside the scope of us as Realtors and what we can provide so tax implications the FERPA implications that's all outside of our scope we're required to do seing things to a certain extent and refer refer out specialized items to professionals be very careful when you're doing all of this stuff not to come across as an attorney do not give a legal advice the phone with Annie on Tuesday out of stereo and what should i I'm a transaction broker in the middle what should I advise them to do it was a very simple answer she went on for about 20 minutes and I responded back and said nothing can't do anything tell them to talk to their attorney you can't especially being a transaction broker in the middle with cut you're on both sides of the deal you can't you can't give any sided you're essentially a messenger as at redaction broker you become the only person in a game of telephone okay compensation this is the total commission that will be in the transaction itself so our standard is six percent if you need to modify that being at the K company you definitely have the freedom to do so make sure you leave yourself enough percentage in here to offer Commission to the other side of the deal I would never drop that below four percent at four percent you're doing to to the buyer side - to your side 8% that's completely up to you guys what you can agree on there is no limitations how low or how high the only requirement for putting in the MLS is offering a certain percentage off to the other side but if there's no maximum so if you want to do an 8 percent commission and do a 3 and a 5 it's not against any regulations there's no violation of code of ethics see one of those did see one it was uh it seemed like it could have been a little sketchy though it was a grievance committee case where the listing agent was working with some Norwegian nationals and they didn't speak English they did an 8 percent commission offer three to the other side of three to five which I don't think it ended up closing anyways but it's it's a matter of deception you need to be able to justify that you're doing something extra for that extra there you go that's justified that's justified I would say that that is definitely justified if you are going to manage the entire renovation process they live in Europe you're here you're every day at the project if you're not going to be doing like a project management and charging them for your services there then definitely do it at the closing and that would be agreeable to them as well but they're only going to pay when they sell the property I think that's a great utilization of it so in here is also where you would include that's the total Commission percentage and if you're charging a transaction fee or processing fee this would be a good place to put that as well so six percent of the total purchase price plus four ninety five again we don't have any mandatory transaction fee no mandatory processing fee so you don't have to do if you choose to that would be a place to enter that I'm going to take it out because I never use them okay Section B would be in the event that a lease I never I never charged transaction fees so I'd leave that blank but if if you choose to do so a $2.99 a to 95 maybe you just want to charge them the 59 or $79 feedback to them you can place that in here if I'm doing the listing for my cousin or my sister for example and I'm not going to take the Commission I'd put 3% here that I'm going to offer to the other side 3 or 2% whatever and then I'll put my transaction fee what it'll cost me to the office in this section as well that way they're going to cover my expense I'm not going to take a commission and will pay to the other side okay depending on when you joined us that's either a 59 or 79 so going as if it's a full Commission of 6% I'm going to leave that here the next section below that line 102 this is for in the event a lease option or a rental with an option to purchase is going to be exercised instead of selling so let's say you end up renting this out for a year with an option to purchase after six months if that option is exercised this is a section that you're going to protect yourself on a hedge so I'd probably put six percent in here as well you never know lease options are super rare but you never know they're rare to come across let alone how much let alone how rare the few of them are to actually go through and exercise that option still talk fishin's in the event that you lease the property count this will cover you for a commission on a rental if that happens to change so if you do a lease with an option to purchase this would cover the lease portion and the section above which we just talked about would cover the option if it's exercised okay so in this section if you're doing one month that's equivalent to 8.3 percent or you can do a 10% okay 10% would be five to five to the tendons broker okay now this is the interesting part why in 108 it's a little bit about what we talked about earlier with the Commission's broker's fee is due in the following circumstances number one if any interest of the property is transferred whether by sale lease exchange government action bankruptcy or any means the transfer regardless of whether the buyer is secured by seller broker or any other person so your commission is due if they transfer the property regardless let's say they do a swap they find someone in Colorado and they end up swapping houses the Colorado in the Florida homes you're due six percent of the listing price period okay the property is sold in a bankruptcy bankruptcy settlement you're still covered on your 6% of the listing price you would go into part of the bankruptcy action okay if the seller procures their own buyer and they're excluded on the additional terms that we talked about you're still covered with your 6% seller still liable to pay you okay number two if the seller refuses or fails to sign an offer at the price and terms stated in this Agreement defaults on an executed contract or agrees with a buyer to cancel an executed sales contract you're still do your commission that's interesting isn't it if you bring a buyer we're at 350 with any type of term if I bring a buyer with 350,000 FHA loan and the seller says no they're due you are do your 6% Commission if the seller elects not to close at the closing table for whatever reason you're do your 6% Commission it does you have to sue them which costs you money but the prevailing party usually gets their attorneys fees paid but essentially you have to sue them or the broker has to sue them and the last scenario was to do defaults or agrees with a buyer to cancel that's an interesting part so in the event is a release and cancellation done on a transaction technically you can still go after them for the 6% Commission let's say you go under contractors an inspection period and it cancels if that contract was at listing price or above with the terms listed on the listing agreement you can still go after that Commission depending on the circumstances we probably would say no but property's listed one point for it no that's not inspect an appraisal appraisal comes in at one point one okay you can go after the seller for the Commission on one point for it yeah nobody's going to do that nobody's going to do that though okay that's in the event the bot is it depends on the circumstances okay so you have a property listed 0.4 you get a contract at 1.1 or you get a contract at 1.4 okay we're full asking price full terms of the listing agreement appraisal comes in at one point one if the contract had a contingency for the buyer to terminate the contract because of the appraisal you have no grounds if the buyer and seller get together there was no contingency and the buyer says I can still get my loan but I don't want to pay more I didn't have an appraisal contingency the seller says don't worry about it we'll go ahead and terminate you are due then exercising their right to cancel you're not do if the buyer and seller make an agreement to terminate you two are due that's the easy way to kind of distinguish but you'd have to really hate your seller and have no relationship because you lose one buyer you're going to find another one and doing the right thing for the customer it's just finding the buyer getting it close and and taking your commission at that time you know we're not in the we're in the business of relationships lasting relationships not for this one transaction so we don't want to have that reputation you as an agent or else as a company that we're trying to weed through the text okay but that's an interesting thing to keep in mind option 3 if within X amount of days after termination date your protection period the seller transfers or contracts to transfer the property or any interest to any prospects with whom the seller broker or any real estate license he communicated regarding the property before termination date I always default this to minimum 90 days always always always always now there's some exceptions to this so what this is saying in the event that someone I showed the property to or came or inquired or communicated with their agent during my listing a period or within 90 days after goes under contract to buys the prompt to buy the property I'm still doing my Commission this protection period is completely erased and wiped out if the property is relisted with another broker so let's say my listing expires August 30th on September 1st if the property is relisted my protection period is done cancelled right there September 1st makes sense doesn't matter if it's relisted by another age another broker you're done next section retain deposits as consideration for broker services entitled to receive at mount of all deposits that seller retains as liquidated damages for a buyers default not to exceed the paragraph eight a fee paragraph eight a is the total Commission so that was a six percent that we put in there so let's say there is a fifty thousand dollar deposit on your one point four million dollar listing and the buyer defaults and the seller retains that for Heusen dollars the percentage in here is the percentage of that deposit that we're going to take not to exceed our Commission so let's say we put nothing in defaults at fifty percent I'm going to leave a blank I used to put 50 percent and have to argue a sellers now defaults at fifty so if the buyer defaults not if they're cancelling within their rights so if they cancel within their inspection period they're within their right there's no retaining of deposit if they get they cancel within the timeline of their loan approval period again they're within their right as long as they've done due diligence to try and obtain that loan but let's say there are five days before closing or two weeks before closing and all those dates that pass the buyer is in default of contract the seller has the right to make a claim on the escrow deposit so let's say in a in this event on that 1.4 million dollar listing we have a $50,000 escrow deposit on 1.4 I'd probably have a little more than that but let's say we have 50,000 in escrow and the buyer defaults we're entitled to 25,000 okay on a 1.4 million sale let's say you were lucky enough to get your seller to do the full six percent on a 1.4 million dollar listing you can have repainted deposit up to eighty four thousand dollars eighty four thousand so that would mean an escrow deposit of of up to one hundred and sixty eight thousand you would still get your full Commission if they defaulted and retain that deposit now keep in mind if a buyer defaults they're not just going to walk away and say okay sell you can have my 50 grand that's not going to happen though they may default you can go back on market and the seller and the buyer can fight over that deposit while you're still marketing the property an escrow dispute does not prohibit you from selling the property something else as soon as the contracts in default go back on market really but you re listed with the K company right once you relist it you're covered oh oh they haven't done that so Ben okay okay I gotcha any questions about retain deposits great next section nine compensation but wait we already did Commission what happened this is the commission that's being offered to the other side in the deal so the first section with Commission had to do with the total this is the amount from the total that we're offering to the other side and if you notice there are three sections that we can check off there's two a single agents there's two a transaction broker and there's two a non broker no brokerage relationship non-representative these are the three sections that you see in the MLS it gives me goosebumps when an agent comes in and says well that's my commission as a listing agent that's my commit that's the buyer's agent Commission in the MLS the MLS only shows Commission offer to a buyer's agent whether you're a single agent transaction broker a non representative it only shows the buyers side of the deal you never see the listing agent side in there so if I'm doing the full six percent and here is where I would place three percent three percent and three percent in all three sections if you don't fill out all three sections you cannot put all three onto the MLS okay if you're offering a bonus this is where a bonus would go thousand dollar bonus thousand dollar bonus along those lines okay you in percents picking out that bonus today's market you rarely have to offer about it's a lots of property is super difficult to sell I don't know about you but if I see 10 properties that my customer would like to see I'm going to show them all 10 I'm not going to push them on the one that has a bonus because it's a relationship business I want to do what's best for them not what's best for my pocket to certain extent all right line 127 Brooke relationship you're using the standard transaction broker listing implement it's defining here what a transaction broker is will act as a transaction broker we'll deal honestly and fairly well account for all funds use skilled care and diligence etc we all know what a transaction broker does does this is defining to the seller what a transaction broker is 11 conditional termination conditional is the important part here okay if you conditionally terminate a listing they cannot relist with another broker if you unconditionally terminate or outright cancel a listing agreement they can when you conditionally terminate listing it goes into withdrawn status in the MLS the seller is no longer going to sell mind they're no longer going to sell I would conditionally terminate w goes in which means it cannot be relisted by another broker the MLS will not allow it to go in until the expiration date of your listening essentially it's saying if they honestly don't want to sell a conditional termination will not be an issue if they balk at the conditional termination it's because they want to relist with another broker and they're lying to you they want to avoid telling you I don't want to work with you okay so what the the field in here is a cancellation fee so because if you bring a buyer at the listing terms and price you're due your commission if they want to get out of that obligation and remove it from the market you can place a cancellation fee in here depending on the property what I intend to do for marketing I'll you to put a zero or five-hundred in there 500 just covers me for a waste of my time and the zero meaning if I if they don't want to work with me I don't want to work with them that's it now keep in mind that that's not the only fee if you read this if the broker agrees to conditional termination seller must sign it withdrawal agreement reimburse broker for all direct expenses incurred in marketing the property and pay a cancellation fee so let's say you went out you held an open house you bought a custom sign for in front of the house you sent out flyers with the property specifically on it you did an email campaign specifically with that property it can't be a general marketing a general canvass has before that property specifically you get reimbursed for those costs keep your receipts okay next do dispute resolution okay this agreement will be construed under Florida law all controversies claims and other matters in question between the parties arising out of this agreement or breach of this agreement will be first attempted to settle through mediation through the American mediation Association or other mediator agreed upon by the parties if litigation arises and you go to court the prevailing party will be entitled to recover reasonable attorneys fees and costs unless the parties agree that disputes will be settled by arbitration here's how arbitration works everybody should initial in this section period everybody should it's much nicer to go to arbitration than it is to go to litigation much okay if disputes are not resolved by mediation they'll be settled by neutral binding arbitration in the county in which the property is located ing to the rules of the American Arbitration Association otherwise known as triple-a step four the roadside or other arbitrator agreed upon by the parties each party to an obligation will pay its own fees costs and expenses including attorneys fees and split the cost of the arbitrator so in the event that you're in disagreement the seller the broker and the seller can go into arbitration which is essentially somebody sitting at the table to mediate the conversation so there is no blood and each party if they want to have an attorney can pay for their own attorney the cost of the arbitrator can be anywhere from three hundred to a thousand dollars okay the cost of the mediator the arbitrator would be split between the two parties if both parties don't agree to go to arbitration it go straight to court and you have to sue each other that's no fun okay pretty simple it's just disclosing to the seller what their rights are ing to the listing agreement if they don't agree okay miscellaneous is just stating it's a legal contract a faxed copy a scanned copy or considered originals okay additional terms these has this has the terms that we placed in there early earlier based on specific circumstances holding it out of the MLS withholding offers below a certain price or exceptions to purchasing for commissions you you you could include that here if you want to include like plans drawing schematics things like that that really has more to do with the buyer in the seller but you could include that here if you want to obtain a copy for example seller will provide broker with copies of plans or drawings or schematics anything like that previous permits that should come as part of the purchase contract there's stuff in there about providing anything that the seller has possession of so I wouldn't necessarily need to obligate them to that here okay down we have our just our sections with contact information cellular signature there's two spaces and broker obviously there is a space down here you as an agent can sign off in this section right here as the authorized sales associate for the transaction which is another reason that I would list my name at the top here a company realty parenthesis my name identifying you as the authorized associate sure you give a copy of the final signed version back to the seller every month a grievance I have at least one or two cases that come up where the key point is the seller never got a copy [Music] if you're going to do it right on the spot that's a great idea if you do electronic signature you don't have to worry about it because they're automatically getting a final copy which is nice and yeah okay so that is the listing they'll exclusive right of sale for a transaction broker there's initials at the bottom of each page you as a sales associate can initial the bottom of each page okay signed copy to the seller you're violating the NA our code of ethics it's an instant violation there's no case if ands or buts if you didn't give it to them you didn't give it to them an automatic violate can I believe the first occurrence is a $500 fine and then it escalates from there you know that's a good question I'm not sure if or renders it null and void I don't believe it would I don't believe it would I know that it is subject to the the code of ethics and it would be definitely an automatic violation I don't think it renders it null and void though and somehow we make one mistake you learn in that you want to know how to write it dot your i's cross your T's now there's multiple formats of the listing agreement itself we just went over the transaction broker which I view as being the standard because we all start as transaction brokers now going up to single agent or we'll go to consent to transition the most commonly used one is the standard transaction broker if you're going to do any deviation of that I would recommend not doing the single agent but doing this format which is the single agent with consent the transition to transaction broker the holistic agreement is exactly the same other than two sections this is the first one disclosing that you're starting off as a single agent and what the duties and responsibilities are of a single agent so the seller here is acknowledging what those duties are below that is the one that they are consenting if you procure the buyer that you will automatically move over to a transaction broker and disclosing what a transaction brokers are but what a transaction brokers liabilities and obligations are so it allows you to start the transaction off in their corner best interest but still open up to moving into a transaction broker in the event you find the buyer as well now this one's really nice but it's longer its longer and it requires more explanation to a seller on the difference between a single age and a transaction broker if it's somebody I don't know I don't have that relationship with I'm going straight into transaction broker as a single agent you're able to work and disclose a little bit more to them than you are as a transaction broker if you're a single agent with the seller and you get information from the buyers side you can divulge all of that information to the seller to benefit the seller when you're a transaction broker you can not do anything that benefits one side over another so anything the buyer tells you that may benefit the seller as a transaction broker you can't tell them you have to keep that information to yourself as a single agent you can do everything to benefit your side that's the difference that that is the biggest difference okay so that's the only difference between these two listing agreements the standard transaction broker doesn't have these two sections the single agent with consent transition has both of them the single agent one only has a single agent notice if I'm going to do a one I'm doing this one I want to have the ability to have the aside in the event I find one will normally go straight into transaction broker it's the shortest listing agreement that's the least amount of questions and problems for the seller I'm going straight to transaction broker you're already covered you're already a transaction broker ditional paperwork okay some agents prefer to start as a single agent they feel it gives them that warm and fuzzy feeling to a seller that they're in their corner I'm in here I'm in the fight with you you know we're going to do it together but if I find the buyer then No okay so I just start off this transaction broker the perception to a seller is that you're there to work and getting it sold for them I don't need to necessarily work to an advantage of one side over another I need to do as a transaction broker you need to balance things out essentially pass messages to get the deal done your obligation is to the deal to the transaction and getting it closed as opposed to benefiting the buyer or benefiting the seller or representing each side okay next we will go any questions about exclusive right of sale excellent next thing we'll go into is the exclusive right to lease this is the rental listing agreement and we'll run through this pretty quickly there aren't too many unique fields in here so the is the same as the sales listing agreement you have the owner's name or seller's name and then you have the broker which again is the cake company or in parentheses your agent name the same the same rule applies as far as a start date and an end date for the listing agreement still a legal requirement in order for it to be valid if you have a listing agreement whether it's a sale or a rental and you leave either of these fields in section one blank it is null and void you must have a defined start and a defined end section too property it has very similar sections to the listing agreement for sale the top is the physical address then we have the legal description if you're writing this inform simplicity transaction desks dot loop and automatically is going to populate this information for you okay personal property including appliances if the property is fully furnished this is where you want to list that inventory if the property is only including appliances you include that there's a washer/dryer you want to include that if it includes kayaks because it's on the intercoastal you want to list that is where you list everything that's going to come inside the property next occupancy is it currently occupied this is again by a renter by a tenant if the owners currently living there this section does not get checked off the information that you're getting here is what you'll be putting into the MLS available dates would be the date after this lease term expires so if the property is currently rented out we'll check that off and we'll put the expiration date let's say it's August 30th 2007 table pride list so in the MLS I would put September 1st as my available date next rental rate and terms this is just like in a sales listing these are the terms that would be acceptable to us up to a landlord you can either put the yearly amount which would be let's say we're doing a $2,000 rental right here is where I would put 24,000 because that's the annual rent or if we're doing it based on monthly numbers we'll do a monthly rent of $2,000 doing a short-term rental vacation rentals seasonal rental anything like that you would change that and place those rates into the weekly or the seasonal section ah there we go I put that into the weekly or the seasonal section and define what season is if you're doing seasonal if it's going to be weekly around the clock then you'll just do weekly and not have to worry about the seasons in this case we're looking for $2,000 per month next I should not specify any services such as water garbage association dues that are included let's say this is a single-family home so nothing is included let's say this out the landlord wants to continue to pay for the yard service and the pool maintenance to ensure that it's being done this is where you would list those items that the pen it's not going to be responsible for and by listing it here it's just putting your agreement with the seller and writing on what they're agreeing to do or the landlord excuse me putting your agreement it's writing with the landlord on what they're agreeing to do so that you can convey that with the rights to convey that to a prospective tenant okay advanced rents deposits and fees the advance rent and deposits will always be held by the owner we do not have an escrow account as broker we're not going to hold it it goes to the owner upon move-in everything is being transferred to the broke to the owner the question is are they going to be keeping it a non interest-bearing account like an escrow of a trust account things along those lines or will it be going into an interest-bearing escrow account or will be going into a interest-bearing escrow account if that's the case technically the tenant supposed to receive 5% per year simple interests any balance of interest will accrue to usually the owner however it never happens it really never happens so by default here I would check off owner and I would check not an interest-bearing account I'm telling the owner to put it in a non interest bearing account and they're going to hold it if the owner doesn't do that that's their fault that's their error in their obligation the landlord has many many disclosures that they have to do as part of a rental contract why do you have a tenant move in and place a security deposit the landlord has to notify them where it's being held and if it's an interest-bearing account or not I can't remember the last time I saw one of those notices nobody ever says anything which is a big it's a big loophole that many landlords leaves themselves leave themselves open for in the event there is dispute on the deposit when they move out but then again most tenants don't know the law or to be able to apply to that but if they go with a crafty landlord-tenant attorney or real estate attorney they're going to hit that right on they eat those three-day notices seven-day notices eviction notices they eat that stuff alive one typos can destroy your entire eviction okay so next advanced rent let's say you're going for first last and security this is where I put my two thousand for my last month and my two thousand for my security it don't need to put the first month rent in here because that would be paid ing to the lease upon occupancy upon taking possession so this is only what's going to be passed on as part of the remainder of the contract advanced rent covers any prepaid rent for example they're paying six months up front five months would go under advanced rent the first month will be paid at move-in and the security deposit of course will go there as well let's say this landlord is acceptable to taking pets and they'd like a refundable or non-refundable pet fee depending on if it's refundable or non-refundable Wolf's watch amount if you're going to do a refundable fee on a two thousand dollar rental it might be another five hundred maybe a thousand dollars if they have a pet this will only apply if the tenants can have a pet as well and you'll need to make sure that this shows on the contract at least or the lease itself okay credit report fee I usually don't put this on there because the 10 is going to have to pay their own application fees to provide a full profile to us when applying for the property itself so I'm not going to charge a credit report fee to pay to the landlord as part of this process if you're inside of an HOA make sure you check off Association application fee find out how much it is typically they're $100 but there's definitely some that are more good yeah absolutely we do have that program you can set up for through the company it's a it's a company that we essentially signed up for and they give us instructions on how agents in our company can sign in under our umbrella so I have step step instructions on where to go on their website where to put your information and you must list a cake company on there so they list you under us you paper you paper search so if you take an application for example and run a full profile you get the full credit report national background and national eviction checks for $30 for entire its entirety now if you just charge the buyer as a tenant the $30 you have them pay the $30 directly or you charge them an application fee for example we do 50 dollars per person here the 20 is for our time to go ahead and do that to maintain the records so we charge 15 we pay 30 they pay you for us we take a credit card because we have that ability for you it can be done in cash money order check however you want to take it or you can pass it on and just have them pay the $30 direct one month rental yeah of course you do of course you want to verify that before on regardless of the term whether it's one week one month or a year you're going to want to verify who's in there because you don't know what's going to happen it's in the landlord's best interest to have a good general profile of what the tenant is like of course you want to do this well this is Association application this is not the background the initial processing or application fee this is in the event there's an association like a homeowner's or condos you're disclosing here what the fee is that they charge in order to apply to that Association associations do but how have you ever have you guys done a rental yet yeah okay so when when you do a rental when you go in the landlord wants to run an application before you even sign a lease with them so that's that's the first step that's the one that we were just talking about this one here the association application is the next step in the event you're in a condo or you're in an HOA and they have an approval product this is the application fee we're talking about they have their own companies to do that correct correct what we were talking about was before you get to that point okay before accepting an offer section see here I want to touch on this for a moment taxes leases for a term of six months or less are subject to state tax on transient rentals and to local tax on tourist development and impact these numbers fluctuate a little bit depending on the tax laws if you are unaware or the seller the landlord is unaware on what the tax percentage is don't tell them don't tell them the percentage we are not accountants we don't know that's outside the scope of our ability as a realtor and it can change so you don't want to be wrong the best well the best thing is if you know they're going to go for a seasonal rental or a short-term anything less than six months and one day at six months and less they're going to be subject to tax so know they're going to rent for a shorter term than that or the offer comes up you want to tell them please contact your accountants who does your taxes and ask them what your obligation will be for next year Toofer out the professionals okay your professional realtor you're not a professional accountant correct it's not due every month or every week when he gets a rental come in it has to be documented and he's going to have to file that with his annual taxes or quarterly however they do it section D here Association approval one must application be made to the Association I will typically put in here within five days of executing lease agreement so within five days of us executing the lease with the pennant the tenants required to apply to the Association now it's in the listing agreement here but the tenant doesn't know what this timeline is so I need to make sure that my timeline matches up in the contract to lease or the lease that we that we drafted okay brokers obligations now this is a little bit different of a look than the sale listing agreement because it just has checkboxes and these are check-ins as opposed to check outs there are opt-ins as opposed to opt outs so if you would like to be able to put a for rent sign on the property you have to check this off to make it applicable we have to check this off if you want to use the owner's name and marketing you have to check that off you're probably not going to so I would if you want to use a lockbox whether it's a combo or a Supra you'd have to check that off okay now this one make sure you read this completely request a credit check on prospective tenants at owner's expense so the owner is going to pay the application or the owner is going to pay the credit check you would check this off if the tenant is going to pay it you don't check it off nine times out of ten to ten is paying for it so don't check that off ex is on behalf of owner but the owner still must execute a special power of attorney authorizing the broker to lease the property on the owners behalf usually that's not checked off the landlord is going to sign their own if you have this this would come up in the event that there's a property manager that's responsible and the property manager is also listing the property where they hold a special power of attorney or limited power of attorney in order to sign leases or rental agreements on their behalf so usually that will not get checked off compensate any sub agents or cooperating brokers in a transaction except when not in Boehner's best interest