HOW TO DIAGRAM A PROBLEM: The simplest way to learn how to diagram is:

1. Draw a t-shape on a blank sheet of paper

2. Label one side at top for the Seller, and Label the other top side for the Buyer (any order)

Example: Seller | Buyer

Question: Broker James of precision realty obtained a listing agreement from Joyce to sell her home for $218,000 cash or with a conventional loan. James marketed the home, and three weeks after he listed the property, a full-price cash offer was submitted by a buyer with the resources to fulfill the terms of the offer. James met with Joyce later that evening and presented the offer. After discussing the terms and projected proceeds, it appeared that Joyce was prepared to sign the offer; however, at the last moment, she had a change of heart and decided not to sell the property after all.

Discussion: Under the terms of most listing contracts, the broker is entitled to a fee or commission once a ready, willing, and able buyer makes an offer that meets the price and terms stated in the listing contract. If the listing contract is in writing, the broker can seek the compensation and even go so far as to sue the seller, if necessary. If the contract is taken orally, the broker has no legal recourse.

HOW TO DIAGRAM A PROBLEM: The simplest way to learn how to diagram is:

1. Draw a t-shape on a blank sheet of paper

2. Label one side at top for the Seller, and Label the other top side for the Buyer (any order)

Example: Seller | Buyer

Question: Broker James of precision realty obtained a listing agreement from Joyce to sell her home for $218,000 cash or with a conventional loan. James marketed the home, and three weeks after he listed the property, a full-price cash offer was submitted by a buyer with the resources to fulfill the terms of the offer. James met with Joyce later that evening and presented the offer. After discussing the terms and projected proceeds, it appeared that Joyce was prepared to sign the offer; however, at the last moment, she had a change of heart and decided not to sell the property after all.

Discussion: Under the terms of most listing contracts, the broker is entitled to a fee or commission once a ready, willing, and able buyer makes an offer that meets the price and terms stated in the listing contract. If the listing contract is in writing, the broker can seek the compensation and even go so far as to sue the seller, if necessary. If the contract is taken orally, the broker has no legal recourse.

HOW TO DIAGRAM A PROBLEM: The simplest way to learn how to diagram is:

1. Draw a t-shape on a blank sheet of paper

2. Label one side at top for the Seller, and Label the other top side for the Buyer (any order)

Example: Seller | Buyer

Question: Broker James of precision realty obtained a listing agreement from Joyce to sell her home for $218,000 cash or with a conventional loan. James marketed the home, and three weeks after he listed the property, a full-price cash offer was submitted by a buyer with the resources to fulfill the terms of the offer. James met with Joyce later that evening and presented the offer. After discussing the terms and projected proceeds, it appeared that Joyce was prepared to sign the offer; however, at the last moment, she had a change of heart and decided not to sell the property after all.

Discussion: Under the terms of most listing contracts, the broker is entitled to a fee or commission once a ready, willing, and able buyer makes an offer that meets the price and terms stated in the listing contract. If the listing contract is in writing, the broker can seek the compensation and even go so far as to sue the seller, if necessary. If the contract is taken orally, the broker has no legal recourse.

Although the listing broker may have the right to bring legal action against the seller, this may not prove to be the best solution for the broker. The time, energy, expense, and possible damage to the broker's reputation may far outweigh the potential benefits. Because the seller did not sign the offer to purchase, the buyer has little recourse other than to pursue the seller on the basis of fraudulent advertising. While sellers can always remove their properties from the market, questions might be raised if they later sell the property to someone else under terms similar to the first contract offer. Of particular concern would be issues of discrimination, which could arise (under federal and state fair housing laws) if it could be shown that the seller's reason for rejecting the first offer was based on the buyer being a member of a protected class.