Fisher Law Corporation’s Frequently Asked Questions

The following are select subjects which are representative of the type of law we practice. Peruse the articles: If you don't find a subject that interests you, call us or e-mail us with your request.

Notice: The information contained in these articles is designed to provide accurate information in regard to the subject matters covered and is made available with the understanding that the information provided does not constitute the rendering of legal or professional services. All information is of a general nature, is specific to California law only, and is not intended to to replace professional or legal advice. Each person’s situation is unique and the information contained herein cannot be applied to any individual’s situation. If legal advise is required, the services of a professional should be sought.


What is an all-inclusive deed of trust? »

What is CERCLA? »

How does a condominium differ from a house? »

What are Covenants that run with the land? »

What is a deed in lieu of foreclosure? »

What are easements? »

What are Encroachments? »

How does escrow work? »

What is fire and flood insurance? »

How do foreclosures work? »

What are the different forms of doing business? »

What do trade terms mean? »

What are liquidated damages in real property contracts? »

What is a Lis Pendens? »

How do loan modifications work? »

What is a Mechanic’s Lien? »

How does a Multiple Listing Service work? »

What is an off-shore trust? »

How do real property taxes work? »

What is Procuring Cause? »

What is a Quitclaim Deed? »

What is RESPA? »

Who bears the risk of loss during escrow? »

What are second deeds of trust? »

What is the Statute of Frauds? »

What is Statute of Limitations on Debts Secured By a Mortgage? »

Does a buyer’s broker have a duty to inspect? »

What is The Parol Evidence Rule? »

What is Adverse Possession? »

 


Q. How does a Multiple Listing Service work?

A. In most of California, real estate brokers pool their listings through an organization comprised of the member brokers. All of the listings filed with the Multiple Listing Service are disseminated among all of its members. Upon the sale of any of the listing properties, the brokerage commission is shared between the listing broker and the selling or “cooperating” broker, with a small fee being paid to the Multiple Listing Service to cover its cost of operation. If the listing broker is also the selling broker he is entitled to the entire commission less the multiple listing fee.

The property owner is entitled to use any form of listing; the Multiple Listing Service cannot specify the terms and conditions of the listings filed with the service. The member brokers can submit listings of any type and for any length or term. The listing broker can specify the amount of the commission and the portion of the commission he is willing to share with the cooperating brokers in any manner he should determine. The Multiple Listing Service cannot directly or indirectly influence the amount of the commission to be paid by a seller because such matters are subject to the contract between the broker and the seller. Also, the Multiple Listing Service cannot directly or indirectly influence the division of the commission between the listing broker and the selling broker.

When a broker files a multiple listing with the Multiple Listing Service for compensation or in expectation of compensation, the listing agent is responsible for the truth of all representations and statements in the listing of which he knows or reasonably should have known that injured anyone by their falseness or inaccuracy. Also, it is an unfair trade practice to disseminate false information about real property through a Multiple Listing Service, or otherwise.

An agent may not place a listing in a Multiple Listing Service unless authorized or directed by the owner in the listing. When a seller specifies that he wants the listing filed with the local Multiple Listing Service he expects the maximum possible exposure to other members of the Multiple Listing Service and he anticipates that they will assist in marketing the property. Since the listing broker owes a fiduciary duty to the seller, he has an obligation to specify terms for the listing, and the sharing of the commission, that will induce the other Multiple Listing Service members to take an interest in the property, even if it means offering a larger share of the commission to the broker who produces the buyer. Therefore, a broker who offers a listing to the Multiple Listing Service that has too short of a term or which offers too small a share of the commission, may be in breach of his fiduciary obligations to his principal.

Since the filing of the listing with the Multiple Listing Service provides broad dissemination of the fact that the property is for sale, some property owners may not want the listing filed with the service but would rather restrict the marketing of the property to the listing broker.

During periods of an active market where the demand for housing exceeds the supply, there is a lesser need for dissemination of listings through the Multiple Listing Service because the listing broker is often able to locate buyers without the assistance of the other members of the Multiple Listing Service. During such periods there is a tendency for listing brokers to retain the listings “in house” so that they can receive the full commission rather than sharing the commission with a cooperating broker. However, since the property receives less exposure to the marketplace, this practice may result in the seller receiving a lesser price for the property and having to wait longer for a sale. The listing broker has a fiduciary duty to explain to the seller the possible detrimental effects of not filing the listing with the Multiple Listing Service, including the reduced exposure and possible lesser price, so that the owner can make an informed decision or not whether the listing should be filed with the service. The listing broker also must explain his personal economic advantage from not filing with the service since he has a conflict of interest with his principal in retaining the listing “in house” in relation to the greater possibility of a faster sale for a higher price through the Multiple Listing Service.

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