With an exclusive agency list, the seller employs a broker who acts as the exclusive agent of the real estate owner. The broker only collects a commission if he or she is the cause of the sale. In addition, the seller reserves the right to sell the property independently and non-binding Almost all listing contracts have an expiry date if the contract is terminated, if no sale takes place by then. If the broker proposes a contract that does not have an expiry date, the broker`s real estate license may be suspended or revoked in most countries. One of the most important details of the property is the list price set by the seller, often based on the broker`s advice. There are two main methods for setting a catalogue price: a competitive market analysis and a formal evaluation. Competitive market analysis determines the price range of a property by comparing the property with recently sold properties of the same design, the same situation and other factors. In a formal valuation, a professional real estate expert determines the market value of the property, that is, the likely price a buyer would pay in the case of an arm-length transaction. A formal valuation is often required when the property is unique, making it difficult to find comparable properties that have recently been sold. Frequent breaches of contract are the task when the stockbroker does little to try to sell the property, or the seller does not go through the sale, if a buyer is found who is willing to pay the asking price. Some contracts have automatic renewal clauses that automatically extend the list period by a certain amount, for example. B 30 days, in the absence of sale. Automatic extension clauses create a contract with no actual expiry date and are not in the seller`s interest because the broker is not motivated to sell the property within a reasonable time.
As a result, in many countries, extension clauses are illegal and most types of standardized real estate do not have the clauses. Death, bankruptcy or madness can and will terminate a listing contract. A net list indicates that the seller receives a predetermined amount of money from the sale of the property, the rest goes to the real estate agent. The real estate agent can offer the property for any amount above the net amount go to the seller. However, because the broker often suggests the sale price to the seller, this can create a conflict of interest, since the broker is motivated to get the seller to accept a lower selling price, so that his own profit can be maximized.