This form is used by a buyer’s agent when employed by a prospective buyer as their sole agent, to prepare an offer to render services on behalf of the buyer to locate and acquire property for a fixed period of time.
Exclusive listings
Under an exclusive listing, a broker receives the sole right to represent:
- an owner by marketing the listed property for sale or lease and locating a buyer or tenant;
- a buyer or tenant by locating property; or
- the owner or a lender to originate a trust deed mortgage.
Exclusive listings require an agent to use diligence in their efforts to fulfill the client’s objectives in locating a buyer, tenant or lender for the property. [See RPI e-book Real Estate Principles, Chapter 24]
An exclusive listing has a specified period of employment set by an expiration date of the employment, such as 90 or 180 days after its commencement. When an expiration date is not included in an exclusive listing, the broker faces suspension or revocation of their license by the Department of Real Estate (DRE). [Calif. Business and Professions Code §10176(f)]
Two types of exclusive employment agreements for buying and selling real estate exist:
- an exclusive agency agreement for a seller or buyer; and
- an exclusive right-to-sell or right-to-buy listing agreement. [See RPI Form 102 and 103]
Both types of exclusive listings establish the broker and their agents as the sole licensed real estate representatives of the client (seller or buyer).
However, they are distinguished by whether or not the broker has any right to a fee when the property is sold or located solely by the efforts of the client.
Under an exclusive agency agreement’s fee provision, the broker does not earn a fee when the client, acting independently of any other broker and the client’s broker, accomplishes the objective of the employment, i.e., selling the listed property or locating and buying the property sought.
Conversely, under an exclusive right-to-sell/buy agreement’s fee provision, the broker earns a fee no matter who during the listing period produces the buyer or locates the property sought under the listing, be it the client, another broker or other representative of the client, or the client’s broker.
Exclusive right-to-buy listings
For brokers and their agents, an exclusive right-to-buy listing creates a positive collaborative activity which is to be matched up to agents who list and market property for sale. It is the opposite side of the transactional coin. [See RPI e-book Real Estate Practice, Chapter 15]
A buyer’s listing agreement employs the broker and their agents to locate qualified properties to be purchased by the buyer represented under an exclusive right-to-buy listing. [See RPI Form 103]
As with an exclusive right-to-sell listing, the right-to-buy variation has provisions for a brokerage fee to be paid by the buyer (when not the seller) when the buyer acquires property during the listing period of the type described in the buyer’s listing.
Also, the exclusive right-to-buy listing provides greater incentive for brokers and their agents and imposes a duty to work diligently and continuously to meet their buyers’ objectives.
The buyer benefits under an exclusive right-to-buy listing due to the greater likelihood the broker will find the particular type of property sought.
Brokers have continuous access to all available properties and will investigate and qualify properties as suitable before they are presented to the buyer. Brokers will also advise the buyer on the pros and cons of each property presented.
A buyer’s broker locating properties listed by other brokers does not become a dual agent or lose their status as the buyer’s exclusive agent merely because the broker works with seller’s brokers. The fee received by a buyer’s broker is typically paid by the seller, directly or through the seller’s broker, and does not create a dual agency.
A broker who seeks out and locates properties at the buyer’s request negotiates the purchase terms as the buyer’s agent regardless of who pays the fee (which is nearly always paid by the seller from the proceeds of the sales price paid by the buyer).
Analyzing the right-to-buy listing
A broker and their agents use the exclusive right-to-buy listing agreement when counseling with a prospective client who needs to find and buy a property. [See RPI e-book Real Estate Practice, Chapter 16]
A buyer’s agent uses the Buyer’s Listing Agreement — Exclusive Right to Buy, Exchange or Option form published by RPI when employed by a prospective buyer as their sole agent. The form allows the buyer’s agent to prepare an offer to render services on behalf of the buyer to locate and acquire property for a fixed period of time. [See RPI Form 103]
The sections of the buyer’s listing agreement include:
- Brokerage services: The employment period for rendering brokerage services and the broker’s due diligence obligations are set forth. [See RPI Form 103 §§1 and 2]
- General provisions: Enforcement of the employment agreement and broker fee-splitting arrangements are included. [See RPI Form 103 §3]
- Broker fee: The buyer’s obligation to either pay a broker fee or assume payment of the broker fee by the seller or a seller’s broker, the amount of the fee and when the fee is due. [See RPI Form 103 §4]
- Property sought: A general description of the type of property to be located for the buyer is then entered. [See RPI Form 103]
- Signature and identification of the parties: On completion of entries on the listing form and any attached addenda, the buyer and the broker (or agent) sign the document consenting to the employment. [See RPI Form 103]
Formal documentation of an obligation to pay a fee — a written agreement signed by the buyer — is the legislated and judicially mandated requisite to the right to enforce collection of a broker fee for a purchase transaction closed by the buyer.
Similarly, the Specific Property Acquisition variation is used when the broker has been employed to negotiate the acquisition of a specific property. [See RPI Form 103-1]
Preparing the buyer’s listing agreement
The following instructions are for the preparation and use of the Buyer’s Listing Agreement — Exclusive Right to Buy, Lease or Option, firsttuesday Form 103. This form is used by a buyer’s agent when entering into the employment of a buyer as their sole agent retained for a fixed period of time, to locate and acquire property.
Each instruction corresponds to the provision in the form bearing the same number.
Editor’s note — Check and enter items throughout the agreement in each provision with boxes and blanks, unless the provision is not intended to be included as part of the final agreement, in which case it is left unchecked or blank.
Document identification:
Enter the date and name of the city where the listing is prepared. This date is used when referring to this listing agreement.
- Retainer period:
1.1 Listing start and end date: Enter the date the brokerage services are to commence.
Enter the expiration date of the employment period. The expiration needs to be set as a specific date on which the employment ends since an exclusive listing is being established.
2. Broker’s obligations:
2.1 Broker’s/agent’s duty: The broker and their agents promise to use diligence in their effort to locate the property sought by the buyer. The agency duties a broker and their agents owe the buyer are always implied, if not expressed in writing.
3. General provisions:
3.1 Agency Law Disclosure: Acknowledges receipt of the Agency Law Disclosure – Real Estate Agency Relationships, which is to be attached as an addendum to this agreement. [See RPI Form 305]
3.2 Authority to share fees: Authorizes the broker to cooperate with other brokers and share with them any fee paid on any transaction.
3.3 Mediation agreement: States the parties agree to non-binding mediation after 30 days of informal negotiations prior to filing a court action
3.4 Attorney fees: Entitles the prevailing party to attorney fees if litigation results from the buyer’s failure to pay fees or the broker’s breach of an agency duty.
3.5 Choice-of-law provision: States California law will apply to any enforcement of this employment.
Fee provisions
4. Broker fee:
4.1 Fee amount: Enter the fee amount negotiated to be paid as a percentage of the sales price or a fixed dollar amount. This amount will be paid when any one of the following conditions occur triggering payment:
a. Fee on any sale: States the broker fee is earned and due if the buyer acquires, exchanges for or options property during the listing period. [See Form 103 §4.1(c) for fee due on post-listing period sales]
b. Termination fee: States the broker fee is earned and due if, during the listing period, the buyer terminates this employment or withdraws from pursuing the purchase of real estate.
c. Safety clause fee: States the broker fee is earned and due if, within one year after the listing expires, the buyer enters into negotiations for the purchase, option, or exchange of property the broker exposed them to during the listing period. Within 21 days after expiration of the listing period, the broker needs to provide the buyer with a list of the qualifying properties reviewed with the buyer during the listing period. [See RPI Form 123]
4.2 Fees paid by seller: The buyer will not owe any fees if the seller pays a fee or the seller’s broker shares a fee in an amount acceptable to the broker. If the seller or the seller’s broker do not agree to pay or share a fee with the broker, the buyer is to pay the broker fee in addition to the purchase price.
4.3 Hourly fee: Enter the negotiated dollar amount of the broker’s per hour fee. The hourly fee is earned for time and effort spent on behalf of the buyer if property is not optioned or acquired by purchase or exchange after a diligent effort is made to locate property.
Type of property sought
Property description: Enter a description of the type of real estate sought by the buyer, including its size, general location, purchase terms, and property requirements.
Signatures
Broker’s/Agent’s signature: Enter the date the listing is signed. Enter the broker’s name and Department of Real Estate (DRE) license number. Enter the agent’s name and DRE license number. Enter the broker’s (or agent’s) signature. Enter the broker’s address, telephone numbers and email address.
Buyer’s signature: If additional buyers are involved, check the box, prepare a Signature Page Addendum form, reference this listing agreement, and enter their names and obtain their signatures until all buyers are individually named and have signed. Enter the date the buyer signs the listing and the buyer’s name. Obtain the buyer’s signature. Enter the buyer’s address, telephone numbers and email address.
Form navigation page updated 06-2022.
Form last revised 2015.
Form-of-the-Week: Exclusive Right-to-Sell and Right-to-Buy Listings — Forms 102 and 103
Word-of-the-Week: Exclusive right-to-sell and right-to-buy listings
Brokerage Reminder: The buyer’s listing — a prerequisite to representation
Brokerage Reminder: The buyer’s listing — the listed buyer benefits
Brokerage Reminder: Get paid by your buyer, not played
Letter to the Editor: Do buyer’s agents have control over their fees?
Book: Real Estate Principles, Chapter 25: Operating under a buyer’s listing
Book: Real Estate Practice, Chapter 16: The buyer’s listing agreement
