House Sales Contract
In the U.S. real estate process, the buyer signs a home purchase contract, and the seller signs a home sales contract, known as the Listing Agreement. When the seller signs this contract with the real estate agent, the agent becomes the listing agent for the seller's house. The house sale is then handled by the agent, and the seller usually doesn't participate directly. We'll now explain key terms in the Listing Agreement and highlight important points. (This article refers to the latest version of C.A.R. Form RLA, Revised 12/18, updated in December 2018.)
EXCLUSIVE RIGHT TO SELL This is the "exclusive agency," the key focus of the entire contract. Among real estate agency methods, it's the most scientific, widespread, and least controversial. Almost all U.S. second-hand housing agents use this approach. COMPENSATION TO BROKER In this method, the seller and the real estate agency clearly define the commission in the written contract, usually a percentage of the final sales price, eliminating any pricing issues. ITEMS EXCLUDED AND INCLUDED Commission specifics, ranging from 5% to 7%, are mutually agreed upon due to U.S. antitrust laws. The contract outlines what parts are sold to the buyer, typically the house and directly connected construction parts, unless stated otherwise. The seller's personal items, like furniture, are usually excluded unless specified. MULTIPLE LISTING SERVICE Confirm with the agent about uploading listing information to the MLS system. Using the MLS system often speeds up the house-selling process, but not all information needs to be uploaded.
BROKER‘S AND SELLER‘S DUTIES This section delineates the roles of both the broker and the seller. AGENCY RELATIONSHIPS It outlines the relationship between the broker and the seller, including instances where the same broker is hired by both the buyer and seller. SECURITY, INSURANCE, SHOWINGS, AUDIO AND VIDEO The section clarifies that if property damage occurs during a buyer's viewing post-listing, the agent is not liable, but the seller can opt for insurance. The seller also consents to the agent capturing photos or videos of the home with potential buyers. PHOTOGRAPHS AND INTERNET ADVERTISING For marketing, the agent will capture visuals of the house for online promotion, with the seller having the option to agree. KEYSAFE/LOCKBOX The use of key boxes or combination locks is also addressed.
The contract includes clauses addressing issues like non-discrimination based on the buyer's race, additional items, and dispute resolution methods. While not the primary focus, it's crucial for everyone to thoroughly read and understand these clauses before signing the contract. The final section of the contract involves filling in accurate information and providing signatures.
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