Property can be defined as any physical or intangible entity that is owned by an individual or jointly by a group of people or a legal entity. Depending on the nature of the property, the owner of property has the right to consume; rent; sell; transfer; mortgage; exchange; or destroy it, or even to exclude others from doing these things.
The owner has the sole power to do anything with the property. In fact one of the chief characteristics that separates the USA from other countries in the world is their extensive focus on property rights. This focus is a huge advantage for businesses looking to protect their intellectual and physical property. Consequently it plays a huge role in the US being able to attract and retain large money-making enterprises from around the globe.
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When one of my friends recently bought a property she unfortunately became well acquainted with these property laws. When she moved into her new humble abode she was not pleased to find that the former owner has misrepresented several aspects of the property. After several rounds of negotiations she eventually worked out a deal, but in the process she learned plenty about the risks involved in dealing with properties that were not properly researched.
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- You must use open listing: The owner of the property have the right to sell the property himself or to pay the broker to sell the property.
- Exclusive agency: There is only one hired broker for a specified time but the owner can also sell the property himself.
- Multiple listing: Brokers join together and combine all their listings. So when the property is sold both the listing and the selling brokers divide the commissions they received.
- Exclusive right to sell: The broker receives a commission when the property is sold. It does not matter who sold the property, it may be the broker, the owner or somebody else.
Most listings are good for an accepted time. The owner can cancel the listing before the brokers earned their commissions, provided the act is in good faith ( meaning the owner should not cancel the listing when the transactions are almost completed just to avoid shelling out what was previously agreed to).
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If a time is specified on the listing, the contract will end as outlined in the agreement. The agreement will continue if the owner ignores the time limit, that is, by accepting the services of the broker or if the owner has acted in an illegal way, by delaying the agreement with the buyer until the time limit expires. In some places if the agreement outlined has a specified time when the contract ends, the owner can cancel the listing only up until the time the broker had used his money and already did some work to put the property up for sale.
If any of the prior agreements are still in effect the broker deserves to get a commission on finding a buyer who is prepared; eager; and capable of buying the property and agrees the conditions specified in the contract. The owner, to safeguard himself, should request for a stipulation under which the disbursement of the broker’s fee will depend on the finalization of the contract and on getting a full payment. If such a clause is not included in the contract the seller is basically putting themselves at the mercy of a broker who has much more experience in such legal matters. Do your homework and become familiar with how property rights can work for you or against you when it comes to some of the largest financial transactions you will make in life.
