12.3 Fulfillment and Termination

Agent’s Performance

• An agent performs by achieving the result specified in the listing.
• Listings often define performance as either:
  • Finding a ready, willing, and able customer, or
  • Effecting a completed transaction (ex: acceptable offer and completed deal)
• Ready, willing, and able means the customer agrees to the terms and is financially/legal capable of completing the transaction.

Due Diligence

Due diligence means verifying the accuracy of statements about the property, ownership status, and the client’s authority to act. Lack of due diligence can increase liability.

Delegation

A listing broker may delegate marketing responsibilities to salespeople, but only the broker can obtain and disburse compensation from the client.

Compensation + Procuring Cause

• Commission is negotiated (percentage or flat fee).
• Disputes often come down to procuring cause—who actually caused the customer to be found and the transaction to happen.
• Two common determinants:
  • Who was first to find/introduce the customer
  • Who induced the customer to complete the transaction
• Buyer-broker compensation can be structured in multiple ways and may be paid by the seller, the buyer, or both depending on the agreement and circumstances.

Causes for Termination + Revocation

Common causes for termination

• Performance
• Infeasibility
• Mutual agreement
• Revocation
• Abandonment
• Breach
• Lapse of time (expiration)
• Invalidity
• Incapacitation or death
• Involuntary title transfer (foreclosure, bankruptcy, etc.)
• Destruction of the property

Revoking a listing: Power vs. Right

Both parties have the power to revoke at any time, but not always the right. Revocation can create liability for damages or commission depending on timing and the listing type.

Quick Check-Ins (Self-Test)