Real Estate Terminology

A listing agreement entered into with a member of a multiple listing organization in a particular area. In effect, an exclusive right to sell granted to the organization, but with the provision that the details will be circulated to other members of the organization. Instructions to sell a property are submitted by the seller to a broker who, as a member of the listing organization, is obliged to make details available to other members, although the seller remains contracted directly to the original listing broker. The listing broker then submits a list of properties on which he is retained either to a central bureau (a multiple listing service) or circulates the details to the other members of the organization who generally act as subagents. In the event of a successful sale, the commission is divided either (a) between the broker who introduced the purchaser (selling broker) and the broker to whom the listing was given (listing broker); or (b) between all the members of the organization on an agreed basis (Frisell v. Newman, 71 Wash.2d 520, 429 P.2d 864 (1967)). Multiple listing is sometimes used (incorrectly) as synonymous with multiple agency. Referred to sometimes as a ‘compulsory listing’, especially when the brokerage fraternity in a particular area are predominantly members of an organization that has a virtual monopoly on conducting property sales. (Anno: 45 ALR3d 190: Realtors–Multiple-Listing Agreements). cf. exclusive listing, open listing. See also cooperating broker, franchise.

An arrangement by which real estate brokers place their listings together so that all members of the multiple-listing service have an opportunity to sell properties listed by other members of the service. The original or ‘listing’ broker obtains an exclusive right to sell and then agrees to supply details of the listed property to all members of the service, usually through a central office operated by a local real estate board or association. When a sale is effected by any member of the service, other than the listing broker, the commission is divided between the listing broker and the selling broker who effects the sale. A fee may also be payable to the central office. Multiple-listing services are used especially for residential properties. Such an arrangement should not preclude any licensed broker from joining the listing service as that may violate antitrust statutes, especially when such a prohibition severely limits a broker’s ability to compete with member brokers (Sherman Anti-Trust Act of 1890 (15 USCA § 1 et seq.); Grillo v. Board of Realtors, 91 NJ Super 202, 219 A.2d 635 (1966); Oates v. Eastern Bergen County Multiple Listing Service, Inc., 113 NJ Super 396, 273 A.2d 795 (1971); Collins v. Main Line Board of Realtors, 304 A.2d 493 (Pa 1973)). The arrangement may also constitute an illegal restraint of trade (Marin County Board of Realtors, Inc. v. Palsson, 16 Cal App.3d 920, 130 Cal Rptr 1, 549 P.2d 833 (1976); Anno: 45 ALR3d 190: Validity, Construction, and Effect of Real-Estate Brokers’ Multiple-Listing Agreement). The fixing of commission rates by the members of the service, or ‘blacklisting’ low commission listings, may be contrary to the provisions of state anti-trust laws or constitute illegal ‘price fixing’ under the Sherman Anti-Trust Act of 1890, § 1 (United States v. Nat’l Association of Real Estate Boards, 339 US 485, 70 S Ct 711, 94 L Ed 1007 (1950); Penne v. Greater Minneapolis Area Board of Realtors, 604 F.2d 1143 (8th Cir. 1979); McLain v. Greater Minneapolis Area Board of Realtors, 444 US 232, 100 S Ct 502, 62 L Ed.2d 441 (1980)). Also, a multiple listing agreement may contravene state legislation designed to maintain business and professional codes and prevent price fixing (People v. Nat’l Association of Realtors, 155 Cal App.3d 578, 202 Cal Rptr 243 (1984); Anno: 22 ALR4th 103: Antitrust—Real Estate Association). See also list-back agreement, multiple listing, office exclusive.

Terms in bold are defined elsewhere in the hard copy of the Encyclopedia.