Real Estate Practice

Front 1

Mello-Roos lien:

Back 1

A lien based on a type of special assessment allowed under the Mello-Roos Community Facilities Act, which allows communities to create special districts to finance certain kinds of improvements or services.

Front 2

Real estate transfer disclosure statement:

Back 2

A statement containing information about the property that a seller of residential property is required to give to the buyer.

Front 3

Safety clause:

Back 3

A clause in a listing agreement providing that for a specified period after the listing expires, the broker will still be entitled to a commission if the property is sold to someone the broker dealt with during the listing term. Also called an extender clause or protection clause.

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Exclusive right to sell listing:

Back 4

A listing agreement that entitles the broker to a commission if anyone— including the seller— finds a buyer for the property during the listing term.

Front 5

Exclusive agency listing:

Back 5

A listing agreement that entitles the broker to a commission if anyone other than the seller finds a buyer for the property during the listing term.

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Open listing:

Back 6

A nonexclusive listing, given by a seller to as many brokers as she chooses. If the property is sold, a broker is entitled to a commission only if he was the procuring cause of the sale.

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Procuring cause:

Back 7

The real estate agent who is primarily responsible for bringing about a sale; for example, by negotiating the agreement between the buyer and seller.

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Ready, willing, and able:

Back 8

A buyer is ready, willing, and able if he makes an offer that meets the seller’s stated terms, and has the contractual capacity and financial resources to complete the transaction.

Front 9

1.

The listing agreement is an employment contract between the seller and the real estate broker. The seller agrees to pay the broker a stated commission if a ready, willing, and able buyer is found during the listing period.

Back 9

2.

The three basic types of listing agreements are the open listing, the exclusive agency listing, and the exclusive right to sell listing. The type of listing determines the circumstances under which the broker is entitled to be paid a commission.

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3.

A listing agreement must be in writing. It should identify the property to be sold, specify the listing price and other terms of sale, state the broker’s authority, include a promise to compensate the broker, set a termination date, and be signed by the seller.

Back 10

4.

The listing agreement should also state the items included and excluded, the conditions under which the commission will be paid, and the seller’s warranties and representations regarding the accuracy of the information provided about the property.

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5.

A safety clause provides that the seller will be liable for the broker’s commission if the property is sold during a certain period after the listing expires to a buyer the broker dealt with during the listing period.

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6.

When residential property is sold, the seller is required to give the buyer a transfer disclosure statement, disclosing any problems concerning the title or condition of the property. On the basis of the information in the disclosure statement, the buyer may choose to rescind the purchase agreement.

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7.

Other disclosures concerning the property that may be required in a transaction include a natural hazard disclosure statement, a residential earthquake hazards report, a lead-based paint disclosure, and a Mello-Roos lien disclosure. A supplemental form may be used for disclosures that do not call for their own separate form.

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