Form 103 – The buyer’s listing agreement

This article presents the buyer’s exclusive right-to-buy listing agreement and instructions on an agent’s use of the form.

A full copy of the form is available here so you can follow along with the instructions.

 

Analyzing the buyer’s listing

The exclusive right-to-buy listing agreement, first tuesday Form 103, is used by a broker or his agent to prepare and submit the broker’s offer to act as a prospective buyer’s exclusive real estate agent and 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.

Formal documentation – a written agreement signed by the buyer – is the legislatively enacted and judicially mandated requisite to the right to enforce collection of a fee for brokerage services rendered to buyers.

There are four parts that comprise Form 103. Each part has a separate purpose and is needed for enforcement of the broker’s employment. The parts are as follows:

1. Brokerage service: 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 (cooperating) 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 Form 103, by which a buyer employs a broker as his exclusive agent to locate suitable property for the buyer to acquire.

The instructions correspond 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.

Identification: Enter the date and place the listing is prepared. This is the date used to identify this document.
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/agent’s duty: Under the listing, the broker promises to use diligence in his efforts 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 upon filling out and attaching an Agency Law Disclosure form as an addendum.
3.	Buyer’s deposit:
	3.1	Advance fees and costs: Enter the amount of deposit negotiated to begin 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: If litigation results from the buyer’s failure to pay fees or the broker’s breach of an agency duty, the prevailing party is entitled to attorney fees.
	4.2	Authority to share fees: The buyer authorizes the broker to cooperate with other brokers and share any fee paid on any transaction.
	4.3	Choice-of-law provision: California law will apply to any enforcement of the employment under the listing.
5.	Brokerage fee provisions:
	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 and trigger payment:
		a.	Fee on any sale: The brokerage fee is earned and due if the buyer acquires, exchanges for or options the property during the listing period. [See §5.1(c) for fee due on post-listing period sales]
		b.	Termination fee: 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: 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	Hourly fee: Enter the negotiated dollar amount of the broker’s hourly 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.
	5.3	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.
6.	Type of property sought:
	Property description: Enter a description of the type of real estate sought by the buyer, including the general location, purchase terms and property requirements.
Signatures:       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 entering their names and obtaining their signatures until all buyers are individually named and have signed the listing agreement. Enter the buyer’s address, telephone and fax numbers, and his email address.