Disclosure of itemized seller costs
A seller’s agent uses a Marketing Package Cost Sheet – Due Diligence Checklist published by RPI (Realty Publications, Inc.) to disclose the itemized costs the seller can expect to incur for the agent to properly market their property for sale. [See RPI Form 107]
The items listed on the marketing package cost sheet are not costs of the broker’s overhead incurred to maintain their brokerage office. [See RPI Form 107]
The costs listed, if incurred, relate primarily to the condition of the property listed, marketed and sold. The costs are incurred to document the integrity of the client’s property, not to pay for services of the broker. Thus, the costs rightly are to be paid by the client who owns the property, not borne by the broker.
When filling out the sheet, the client is given choices as to when and how they will pay the stated costs.
The client may agree to pay the charges directly to third-party vendors when billed. In this case, the broker coordinates the arrangements for payment with the vendors as an agent of the client. When the client’s check is payable to the vendor, not the broker, it is handed to a seller’s agent for delivery to the vendor. The check still constitutes trust funds received by the broker, and requires an entry in the trust fund ledger maintained by the broker.
Alternatively, the client may deposit the estimated costs with the broker, making the check payable to the broker, thus classifying the payment as advance costs. The broker will then pay the charges from the funds held on deposit when billed by the vendor.
The marketing package prepared by the seller’s agent estimates the cost of third-party investigative reports prepared by unbiased professionals or government agencies addressing essential aspects of the property’s condition that are of concern to prudent buyers.
The seller’s agent uses the Authorization to Provide Services – General Services published by RPI when preparing a marketing package to authorize another professional or government agency to perform one of the activities referenced in the marketing cost sheet. [See RPI Form 133]
These reports put a face on the property so it can be better evaluated by prospective buyers and a sale more efficiently negotiated. Negotiations with a prospective buyer requiring full disclosure commence when the prospective buyer or their agent seek out additional information on the listed property beyond the skeletal data contained in a promotional flier.
Further, when entering into the listing agreement, the seller’s agent presents the marketing package cost sheet to the seller as a “seller’s budget” for expenses they can anticipate. [See RPI Form 107]
