Listing and buyer agency agreements, and termination of agency

Agreements establish the assignment

A listing agreement employs a broker to sell or lease an owner's property; a buyer agency agreement employs a broker to represent the buyer in locating and negotiating a purchase. Review the parties, property or search scope, services, term, compensation, exclusivity, and termination provisions. A listing does not transfer ownership or grant unlimited authority to bind the owner.

New York's residential agency disclosure form is not a contract. Under Real Property Law § 443, the listing agent provides it before the listing agreement, and the buyer's agent provides it before the buyer agency agreement, obtaining acknowledgment of receipt. Acknowledging disclosure does not promise a commission.

Compare listing types

• Exclusive right to sell: the owner owes the agreed commission to the listing broker even if the owner or another broker finds the buyer.
• Exclusive agency: the owner may independently find the buyer without owing the listing broker a commission. New York's required residential explanation states that if another broker finds the buyer, the owner owes a commission to both the selling broker and the present broker.
• Open listing: nonexclusive employment permits several brokers to seek a buyer. The broker who earns the commission through procuring cause is entitled to it under the agreement; an independent owner sale generally earns no brokerage commission.

Under 19 NYCRR § 175.24, residential exclusive listing commission agreements must carry the prescribed explanation, attached or printed, in type of at least six points, signed or initialed by the homeowner or homeowner's agent. For an exclusive residential listing obtained by a multiple listing service member, the agreement must give the homeowner the option of negotiated purchase offers being submitted through either the listing broker or selling broker.

A net listing lets the broker retain the sale price above a specified net amount payable to the seller. New York prohibits these contracts under 19 NYCRR § 175.19.

Ending the relationship

Agency can end through performance, expiration, mutual agreement, principal revocation, agent renunciation, or operation of law, such as an individual principal's death or destruction of the property. Ending authority does not necessarily eliminate damages for breach, earned compensation, or a contractual protection clause. Confidentiality generally continues.

New York prohibits automatic continuation of an exclusive listing beyond its fixed termination date under 19 NYCRR § 175.15; an agreed renewal is different. Under § 175.14, a departing salesperson must promptly turn over all listing information to the former sponsoring broker. The salesperson's departure does not itself transfer the brokerage's listing agreements.