This article presents the buyer’s exclusive right-to-buy listing agreement with instructions for an agent’s use of the form.
Analyzing the buyer’s listing
The exclusive right-to-buy listing agreement, first tuesday Form 103, is used by a broker and his agents to prepare and submit the broker’s offer to act as a prospective buyer’s exclusive real estate agent employed to locate property sought by the buyer in exchange for the buyer’s assurance a fee will be paid the broker if the buyer acquires the type of property sought during the listing period. [See first tuesday Form 103]
Formal documentation of an obligation to pay a fee — a written agreement signed by the buyer — is the legislatively enacted and judicially mandated requisite to the right to enforce collection of a brokerage fee from the buyer.
Each section in Form 103 has a separate purpose and need for enforcement. The sections include:
1. Brokerage services: The employment period for rendering brokerage services, the broker’s due diligence obligations and any advance deposits are set forth in sections 1, 2 and 3. General provisions for enforcement of the employment agreement and broker fee-splitting arrangements are included in section 4.
2. Brokerage fee: The buyer’s obligation to either pay a brokerage fee or assure payment of the brokerage fee by the seller or a listing broker, the amount of the fee and when the fee is due are set forth in section 5.
3. Property sought: A general description of the type of property to be located for the buyer is set forth in section 6.
4. Signatures and identification of the parties: On completion of entries on the listing form and any attached addenda, the buyer and the broker (or his agent) sign the document consenting to the employment.
Preparing the buyer’s listing agreement
The following instructions are for the preparation and use of the Buyer’s Listing Agreement, first tuesday Form 103, with which a buyer employs a broker as his exclusive agent to locate suitable property for the buyer to acquire.
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.
Enter the date and name of the city where the listing is prepared. This date is used when referring to this listing agreement.
1. 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 must 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 his agents promise to use diligence in their effort to locate the property sought by the buyer. The agency duties a broker and his agents owe the buyer are always implied, if not expressed in writing.
2.2 Agency Law Disclosure: Check the box if an Agency Law Disclosure is to be attached as an addendum to this agreement, and if so, fill out and attach the form.
3. Buyer’s deposit:
3.1 Advance fees and costs: Enter the amount of deposit negotiated to commence the brokerage services.
Check the box for each form to be attached as an addendum and fill out and attach the forms detailing the services to be rendered or costs to be incurred and charged against the deposit. [See first tuesday Forms 106 and 107]
4. General provisions:
4.1 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.
4.2 Authority to share fees: Authorizes the broker to cooperate with other brokers and share with them any fee paid on any transaction.
4.3 Choice-of-law provision: States California law will apply to any enforcement of this employment.
5. Brokerage fee:
5.1 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 brokerage fee is earned and due if the buyer acquires, exchanges for or options property during the listing period. [See Form 103 §5.1(c) for fee due on post-listing period sales]
b. Termination fee: States the brokerage 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 brokerage fee is earned and due if, within one year after the listing expires, the buyer purchases, options or exchanges for property the broker exposed him to during the listing period. Within 21 days after expiration of the listing period, the broker must provide the buyer with a list of the qualifying properties. [See first tuesday Form 123]
5.2 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 pays the brokerage fee in addition to the purchase price.
5.3 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 should property not be optioned or acquired by purchase or exchange after a diligent effort is made to locate property.
6. 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.
Broker’s/Agent’s signature: Enter the date the listing is signed and the broker’s name. Enter the broker’s (or agent’s) signature. Enter the broker’s address, telephone and fax numbers, and his email address.
Buyer’s signature: Enter the date the buyer signs the listing and the buyer’s name. Obtain the buyer’s signature. If additional buyers are involved, prepare duplicate copies of the listing agreement and enter their names and obtain their signatures until all buyers are individually named and have signed. Enter the buyer’s address, telephone and fax numbers, and his email address.