Florida Listing Contracts: Know Your Contract Between You and Your Florida Real Estate Agent and Broker

Posted By on February 25, 2014

Last Update: 02/24/17

Once you finally make the decision to sell your Florida home, (whether it’s a Miami oceanfront condo, a single family dwelling in a quiet neighborhood or a duplex, townhouse, or other type of house), you need to let world know by advertising it for sale, in both the local housing market and beyond, with the hope of finding the right buyer. Usually, this means working with a Florida real estate agent and a Florida real estate broker. During the sale process, you’ll be dealing with several legal contracts, including the documents you sign with the buyer — like the sales contract and the transfer documents (Deed, Bill of Sale, Closing Statement, etc..). However, the first real estate contract you will be signing, usually, is the listing agreement with the Florida real estate professional who will be selling your home for you.

 

 

Florida Real Estate Listing Agreements: The Contract with Your Florida Real Estate Agent

As we all know, in Florida when you sign a contract with a real estate broker (many of these brokers work for national brands, with some offices being locally owned and operated) a particular real estate agent will be assigned to work on your property sale. Using the industry lingo, once you “list” your home with the real estate company you agree to have the agent market your home for sale in exchange for a real estate commission.

However, not all listing agreements or provisions therein are the same. In South Florida, for example, home sellers may sign, among others, (1) open listing contracts, where the seller will pay a commission only if the agent brings an acceptable offer  – the seller also tries to find a buyer too (and if the seller does find a buyer, no commission is due to the agent); or (2) exclusive right to sell listing contracts, which is the most common kind of listing agreement in Florida, where the listing agent has total responsibility for finding a buyer for the home for a set period of time (e.g., 90 days).

See a sample Florida Association of Realtors form for an Exclusive Right of Sale Residential Listing Agreement (from 2014).

Are Florida Listing Agreements Governed by Florida Contract Law?

Once a home owner signs a listing agreement, he or she has entered into a binding contract with the real estate agent and the Seller cannot unilaterally decide to back out or cancel the deal unless the contract allows for it. In contract terms, there needs to be a “right of rescission” in the contract, which gives details on how to notify the broker or agent on the seller’s decision to cancel the listing as well as time constraints, the cost for cancelling, etc.  If the home owner is dissatisfied with the real estate agent or broker, then he or she will have to look to the contract terms for options.

What Happens If the Real Estate Agent Fails to Perform Its Duties?  Can I Sue?

Whether or not the real estate agent or real estate broker is breaching the contract is a legal question; if they have, then the home owner and seller can sue for breach of contract damages.

However, in Florida listing agreements more often than not there will be a provision in the listing contract that overrides the usual practice of filing a breach of contract lawsuit down at the courthouse. In the agreement there will be a “Dispute Resolution” provision which likely says the parties will first attempt to resolve any claims or controversies by non-binding mediation.  If mediation fails, then  the parties are free to litigate their issues.

Additionally, the Dispute Resolution paragraph will also have an arbitration option within it.  If that provision has been initialed, then the homeowner/seller has agreed to avoid litigation in a traditional manner and instead opted to have any disagreements or controversies decided in a binding alternative dispute resolution proceeding that is not a courtroom proceeding. Here, an “arbitrator” makes the call that a judge would normally make (the parties share the cost of the arbitrator, plus other costs, for this procedure).

Warning: Florida Listing Agreements Contain An Arbitration Clause

For example, the 2014 version of the Florida Association of Realtors’ Exclusive Right of Sell Listing Agreement contains the following arbitration clause in its paragraph 12:

Dispute Resolution: This Agreement will be construed under Florida law. All controversies, claims, and other matters in question between the parties arising out of or relating to this Agreement or the breach thereof will be settled by first attempting mediation under the rules of the American Mediation Association or other mediator agreed upon by the parties. If litigation arises out of this Agreement, the prevailing party will be entitled to recover
reasonable attorney’s fees and costs, unless the parties agree that disputes will be settled by arbitration as follows: Arbitration: By initialing in the space provided, Seller (____) (____), Sales Associate (____), and Broker (____) agree that disputes not resolved by mediation will be settled by neutral binding arbitration in the county in which the Property is located in accordance with the rules of the American Arbitration Association or other arbitrator agreed upon by the parties. Each party to any arbitration (or litigation to enforce the arbitration provision of this Agreement or an arbitration award) will pay its own fees, costs, and expenses, including attorney’s fees, and will equally split the arbitrator’s fees and administrative fees of arbitration.

Homeowners/sellers entering into listing agreements with real estate brokerage firms should be advised that it is sometimes cheaper and faster for both sides to opt for arbitration instead of the traditional courtroom litigation route. Florida home owners and sellers should also know that these “arbitration clauses” once signed are usually going to be held valid by a trial court judge and therefore cannot be canceled by a home owner/seller who learns to late that arbitration may not serve their best interests.

In fact, in some cases, homeowners are surprised to learn that the costs of arbitration turned out to be higher than if the controversy was brought before a Florida court of law for resolution.  That’s why I always tell my clients to never sign any documents related to a real estate transaction before I have a chance to review them.  Even a “simple” listing agreement can come back to bite them.

A good piece of advice if you are facing a dispute with your realtor is to speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.

Related Article:

Can You Sue a Florida Real Estate Agent for Fraud and Can You Recover Punitive Damages?

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Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.

 
 
 
 
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Comments

22 Responses to “Florida Listing Contracts: Know Your Contract Between You and Your Florida Real Estate Agent and Broker”

  1. Madelyn says:

    Good Evening Larry, In my divorce ….What can I do? I’m grateful for your time and any suggestions you may have. Thank you!

  2. Hi Madelyn,
    We can’t answer specific questions on personal matters in blog comments; however, happy to chat with you if you’d like to call our toll-free number (above). Your personal information has been removed from your comment before publication.
    Best,
    Larry

  3. Fredo says:

    Hi, I appreciate the informations given.

    where can I find a copy of a contract which is singned on public property, church?

    would it be found in public reccord?

  4. Hi Fredo,
    Call the courthouse where the land is located and ask the clerk’s office for help in getting copies.
    Best,
    Larry

  5. Darrell Schwartz says:

    Can a Judge in a divorce force one of the parties to sign a Blank Listing Agreement and give it to the other person to be in complete control of?

  6. Hi Darrell,
    We cannot answer personal queries in blog post comments, so we ask that you give our office a call (see the toll free number above?) for a chat.

    Thanks,
    Larry

  7. Edward Peterson says:

    Owner listed a property…midway through the listing period the owner is considering not selling and staying in the home. What type of offer is the owner required to accept and/or be responsible for the commission?

    Thank you for your time.

    Edward

  8. Hi Edward,
    We cannot answer personal queries in blog post comments, so we’ve edited your comment to protect your personal information and ask that you give our office a call (see the toll free number above?) for a chat.

    Thanks,
    Larry

  9. Peter Torrance says:

    My Orlando Realtor asked my wife to sign an Exclusive Listing Agreement on Dotloop….

    Thanks

  10. Hi,
    We cannot answer personal queries in blog post comments, so we’ve edited your comment to protect your personal information and ask that you give our office a call (see the toll free number above?) for a chat.

    Thanks,
    Larry

  11. Karon says:

    Is there a limit of months that a real estate agent can require you to agree to on a listing of a mobile home in a lot rental community

  12. HI Karon,
    We cannot answer personal queries in blog post comments, so ask that you give our office a call (see the toll free number above?) for a chat.

    Thanks,
    Larry

  13. Kimn says:

    In Florida I am selling my home under a contract for deed. I want to pay my RS agent but I feel that it shouldn’t be the entire 6% until the home actually closes in 24-30 months. I’d like to pay 3% now and then the rest later. Laws?? Thank you

  14. Hi Kim,
    We cannot answer personal queries in blog post comments, so we ask that you give our office a call (see the toll free number above?) for a chat.

    Thanks,
    Larry

  15. Cody says:

    If ur selling ur home to an investor how do you know what a real contract is in the state of Florida

  16. […] Sharing What We Know About Florida Real Estate Law. – Posted By Larry Tolchinsky on February 25, 2014 Last Update: 02/24/16. Once you finally make the decision to sell your Florida home, (whether it’s a Miami … […]

  17. Sally Brennan says:

    If there are 5 owners to a Florida home, can one owner enter into an agreement with the selling real estate company/agent without the others approval / signature?

  18. Sorry if this is frustrating! However, we’re not allowed to answer personal queries in blog comments, so we ask you give our office a call (see the toll free number?) for a free chat.
    Thanks,
    Larry

  19. Al C says:

    I live in another State and want to relocate to FL. I have asked a FL Real Estate Salesperson who works for ….

  20. Sorry if this is frustrating! However, we’re not allowed to answer personal queries in blog post comments, so we ask that you give our office a call (see the toll free number above?) for a chat about your situation.
    Thanks,
    Larry

  21. Herbert Beyenbach says:

    I have a question regarding Listing Agreements. I understand that an “Exclusive Agency Agreement” is not very popular here in Florida and that I may have to sign an “Exclusive Right to Sell Agreement.” My question: If I find a buyer directly, without intervention of any kind of the listing broker, is he still entitled to the full commission, or part of it? Is this is negotiable? Thank you. (By the way, I love your site! great content, great explanations).

  22. Sorry if this is frustrating! However, we’re not allowed to answer personal queries in blog post comments, so we ask that you give our office a call (see the toll free number above?) for a chat about your situation.
    Thanks,
    Larry

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