Opinion ID: 543769
Heading Depth: 3
Heading Rank: 1

Heading: Market Force and the Real Estate Business

Text: 5 According to the record, residential real estate sales generally begin when a homeowner signs an exclusive marketing contract with a broker. The broker (listing broker) then lists the property on a local multiple listing service (MLS). By listing on the MLS, the broker is making a general offer of subagency to any salesperson who can find a buyer to complete the sale. Other salespeople can show the house and try to arrange a sale with a prospective buyer. These individuals are called selling brokers or selling agents and, while working primarily with the buyer, are considered to be agents of the seller. In fact, their duty of loyalty lies with the seller. While commissions may vary, the traditional commission is 6% of the cost of the house, split so that the listing broker receives 60% (or 3.6% of the cost of the house) and the selling agent receives 40% (or 2.4% of the cost of the house). 6 Market Force began operations in 1986 as a buyers' broker. It differed from traditional real estate firms in that it signed exclusive contracts with individuals seeking to purchase a house. The Market Force agent would find houses that the agent believed might interest clients, and show the houses to them. Most significantly, Market Force agents owed their duty of loyalty to the buyers. The contract between Market Force and the buyers specified that Market Force would receive a fee equal to 40% of the sales commission, or 2.4% of the selling price. The contract further anticipated that, at the time of sale, the buyer would request that the listing broker pay Market Force this commission. If the broker cooperated, the buyer would owe no further obligation to Market Force. 7