Prac pp chp 4

1. Chapter 4
Breakdown of the Listing
Agreement
How to Fill Out the Listing Agreement

2. I. Breakdown & Analysis
of Listing Agreement

3. Listing Agreement
 Because the listing agreement is usually the first in a
series of contracts and documents used in the sale of
real property, you must completely understand the
form and fill it in accurately and explicitly, leaving no
room for doubt

24. II.
Completing the
Listing Kit

25. Listing Kit
 A LISTING KIT is the packet of forms an
agent provides to the seller when taking a
listing

35. III. The Broker’s Role in
Real Estate Appraisal

36. Appraisal
 Helping a seller determine a home’s selling price is
the key to getting the seller to set a reasonable
listing price
 Proper valuation is the key to real estate sales

37. A. Helping Sellers Determine
Listing Price
 Market value is sometimes referred to as “exchange
value” or “value in exchange”
 MARKET VALUE refers to the amount of cash that is most
likely to be paid for a property on a given date in a fair and
reasonable open market sale
 A property well listed is a property half sold
 As a fiduciary, you owe it to your principal to obtain the best
market price, but you also owe it to yourself to get the listing
at a saleable price

38.  It’s up to you to research the market and come up
with a saleable price, or market value, derived
from a reliable source, usually the MLS
 There are several approaches to valuation:
 Market Data/Comparative Approach
 Cost Approach
 Net Income/Capitalization Approach

39. B. Market Data Approach or
Comparative Approach
• Comparing the potential listing with similar properties of the same type
and class, which have sold recently or are currently on the market,
produces an estimate of value under the market data approach
• The comparative approach is the most reliable expression of value
because it represents the reactions of informed buyers and sellers
• A comparative market analysis is your most effective tool at your
disposal

41. C. Inventory (MLS)
 Inventory (MLS) – is the number of
months’ supply of home listings “for sale” at
a particular time
 In a BUYER’S MARKET there are more
listings than buyers
 In a SELLER’S MARKET there are more
buyers than listings

42. D. Pitfalls in Accepting
Overpriced Listings
 Do not take a listing when it is overpriced by
a relatively large margin
 Overpriced properties are stigmatized by
market-savvy brokers who won’t waste their
time showing them
 Houses on the market for too long, even
with a price reduction, may now be
perceived by buyers as having something
wrong with them

43. E. Licensed Appraisers
 California allows sales agents to make unverified or
informal appraisals, but professional appraisers must be
licensed by the California Office of Real Estate
Appraisers
 Professional appraiser’s work is vital to lenders, expert
testimony in legal proceedings, or taxation matters.

44. CHAPTER SUMMARY
• Breakdown and Analysis of
the Listing Agreement
• Completing the Listing Kit
• The Broker’s Role in Real
Estate Appraisal