Listing Agreement

Colorado’s “Exclusive Right to Sell” Listing Contract

Once cleaning and staging are complete, we’ll prepare, review and sign the “Exclusive Right to Sell Listing Contract”. This exclusive listing agreement outlines the specifics of the contract and is legally binding between the Seller and the broker.

• Exlusive Right to Sell Listing Contract
• General Overview

Timing

Terms of the agreement begin with a specific start and end date covering the listing period. Denver custom is typically a six-month period.

Brokerage Services and Duties

This section outlines the duties the Seller shall expect, at a minimum, from the agent and the agent’s brokerage firm. Examples range from performing the terms of the contract with the Seller, to the agent not revealing motivating factors for the Seller’s reason for leaving the property, to the agent not discussing that the Seller will accept less than an offer price.

Additional Duties of a Seller’s Agent

This applies to “Exclusive Right to Sell Listing Contracts” only. The Colorado Real Estate Commission also allows “Open Listings” (no single agency has the exclusive right to sell your property), and “Exclusive Agency Listings” (you retain the right to sell your property should you bring the Buyer; hence, avoiding paying a commission). That said, to promote your property and represent your full fiduciary duties, the “Exclusive Right to Sell” is my preference. The additional duties for the “Exclusive Right to Sell” listing include:

• Promoting the interests of Seller with utmost good faith, loyalty and fidelity
• Seeking a price and terms that are acceptable to Seller
• Counseling Seller as to any material benefits or risks of a transaction that are actually known to the Broker

Brokerage Relationship

This defines the nuances and differences in the various types of relations and explains how the relationships will be treated in various scenarios.

Seller’s Obligations to Broker

This outlines the Seller’s agreement to allow the Broker to act as a conduit for the Seller in handling all negotiations and communications from other real estate agents, prospective Buyers, tenants, etc., throughout the listing period. Additionally, it assures that the Seller is not working with another agent; notes that marketing material produced by the real estate agent is the agent’s property to market the home as indicated and is allowable for syndication in MLS and other sources during the course of the listing; and finally, if the property is in disclosure, the Seller chooses whether to authorize as such in MLS and additional marketing materials.

Price and Terms

This section covers the following:

• List price
• Terms (cash, conventional, FHA,VA or other)
• Allowable loan discount points, should you want to contribute
• Buyer’s closing costs, should you decide to pay a portion
• Earnest money (amount and paid to which title company)
• How you would prefer to receive Seller proceeds at closing (closing company’s trust account, funds electronically transferred, or a cashier’s check)

Advisory

This section focuses on tax withholding to warn that the Colorado Department of Revenue may require the closing company to withhold proceeds of the Sale when the Seller is a foreign person or will not be a Colorado resident after closing.

Inclusions and Exclusions

This identifies all items included in the purchase price. Fixtures attached to the property on the listing date are considered inclusions. Personal property, e.g., window coverings, storage sheds, fireplace inserts, etc. are also identified (see the full list on the listing contract). The time to swap out drapery rods, chandeliers, mirrors, etc., is prior to this date. Parking and storage facilities, water rights, growing crops and exclusions are also addressed.

Title and Encumbrances

This section outlines how title will be conveyed, defines Seller’s evidence of title to the property and details any title materials, leases, improvement location certificates, and surveys in the Sellers’ possession. Additionally, Seller agrees to disclose any known easements, liens, leases, governmental liens for special improvement and other encumbrances to the property to the real estate agent.

Association Assessments

This section addresses that the Seller identifies the regular association assessments, how they are paid (i.e. per month, quarter, annually), special assessments and any outstanding owner balances.

Possession

This refers to the date that possession of the property shall be delivered to the Buyer.

Material Defects, Disclosures & Inspections

Colorado law requires Brokers to disclose to any prospective Buyer “adverse material facts” in regards to the property, such as title, physical condition, environmental hazards, nonconforming issues, etc. Seller’s obligations as per Colorado law are to disclose known material latent (not obvious) defects. See more under additional disclosures below.

Compensation to Brokerage Firm

This defines the amount of commission the Seller agrees to pay the Brokerage Firm, the terms under such commission shall be earned, and the holdover period (usually a 30-day period following the expiration of the listing agreement).

Limitations on Third-Party Compensation

Neither the Brokerage, nor the Broker, may receive payment by any third party (i.e. lender, Title Company, home warranty company, etc.), unless the Seller signs a separate written consent. Otherwise, it is a violation of RESPA.

Other Brokers’ Assistance, MLS, and Marketing

The Broker advises the pros and cons to marketing methods, the use of MLS, online strategies, the use of the lock-box, etc. and the Seller chooses the methods acceptable based on the discussion. The Seller is also informed of the Buyer’s agent or transaction broker’s percentage of compensation based on the gross sales price.

Cost of Services and Reimbursement

The Broker and Brokerage Firm agree to incur the expenses to market the property and the Seller agrees to pay for other products or services such as radon tests, surveys, title reports, etc.

Maintenance of the Property

The Broker and the Brokerage Firm are not responsible for property maintenance and will not be held liable for damage to the property unless damage is caused by their negligence or intentional misconduct.

Nondiscrimination

All parties agree that they will not discriminate unlawfully against prospective Buyers.

Recommendation of Legal and Tax Counsel

The Colorado Real Estate Commission-approved forms (including listing agreements) all mandate that Brokers inform Sellers/Buyers that the contracts have important legal consequences and recommend legal and tax counsel prior to signing the contract.

Mediation and Attorney Fees

If a dispute arises regarding the listing contract, parties agree to proceed in good faith and submit the matter to mediation, where costs will be equally shared. Should mediation attempts fail and it goes to litigation, the court shall award costs, expenses, legal fees, etc. to the prevailing party.

Additional Provisions/Attachments

This covers additional items agreed to by the Seller and Broker, which are not approved by the Colorado Real Estate Commission.

Notice of Delivery and Choice of Law

This section includes that the Seller may choose facsimile or e-mail as a method of correspondence if beyond physical delivery of signed documents.

Modifications/Counterparts

This section stipulates that all changes to the terms of the contract must be in writing. If more than one person is indicated as a Seller, the contract may be executed separately; the copies combined and deemed to be a complete contract between parties.

Entire Agreement/Copy of Contract

This agreement represents the entire contract between parties and Seller will get a copy of the agreement signed by the Broker.

In addition to the listing agreement, there are other disclosures, one of which is a Seller’s property disclosure. This property disclosure is completed by the Seller, returned to the listing agent and later provided to the prospective Buyer, usually within two days of “under contract status”. While it is not mandatory for the Seller to provide the property disclosure, it is standard practice when selling an owner-occupied home in Denver.

Additional Colorado Disclosures From the Seller

• Source of Water Addendum
• Lead-based Paint Disclosure and Lead Based Paint Obligation of the Seller (in homes permitted prior to January 1, 1978)
• Square Footage Disclosure
• Mold Disclosure
• Definition of Agency, which describes the different types of agency relationships in Colorado.

Closing Instructions are also completed at this time.