• Sale Defined - Duty Assumed by Real Estate Broker - Is Entitled to His Commission Upon Producing Purchaser Able and Willing to Purchase on Vendor's Terms - Predicament of Vendor Who Does not Read Contract with Broker - Suggestion as to Equitable Contract - Advantage of Well-Kept Premises - Advertising the Place - Owner Insensible to Possibilities of his Own Surroundings - Owner Should Deal with Experienced, Well-informed Broker - Best Time to Sell - Selling or Holding, Which? - Real Estate Business Very Uncertain if Loosely Conducted - Duty of Owner - Giving Options - Bill of Sale of Personal Property - Conditional Sales of Personal Property - Sales of Stocks of Merchandise in Bulk.
Sec. 140. A sale is a contract by which, for a pecuniary consideration, called the price, one person, called the seller, transfers to another person, called the buyer, an interest in property. The seller is also called the vendor and the buyer is called the vendee.
Sec. 141. A real estate broker or agent is one who makes a bargain for another and receives a commission for so doing.
Sec. 142. The duty assumed by such a broker is to bring the minds of the buyer and the seller to an agreement of sale, together with the price and terms on which the deal is to be made, and until he has done this, his rights to a commission do not accrue; but the agreement by the purchaser must be one that is valid and can be enforced. A deposit or payment on account made by the purchaser to the broker, is insufficient; a writing, signed by the party to be charged, is indispensable.
Sec. 143. To entitle a broker, who has been employed to negotiate a sale of real estate, to his commission as agreed upon with his principal, he must produce a purchaser able, ready and willing to purchase on the vendor's terms, and such purchaser must sign a binding contract to purchase on the vendor's terms. As soon as the purchaser has done this, the agent's right to his commission accrues, and such right does not depend upon the final acceptance by the purchaser of a conveyance to him of the property sold; nor does it depend on the vendor completing the sale.
Sec. 144. A written contract of purchase may be rendered unnecessary if the agent brings the vendor and the purchaser together, and the purchaser states to the vendor that he is able, ready and willing to complete the deal provided the vendor will make a conveyance to him of the property. In such case, the agent has done all that he can do, and if the vendor, under such circumstances, refuses to complete the sale, he nevertheless will be compelled to pay the agent his commission. Where the broker has brought the parties together in this way, and they have agreed verbally upon the terms of the sale, it is necessary for them to enter into a written memorandum of sale, signed preferably by both of them, and reciting the price, terms and other particulars. Such agreement relates only to the deal between the parties, and if not entered into, will not affect the broker's right to his commission.
Sec. 145. The object of the vendor is to make a sale of his property, and the rule of law is that when a real estate broker has produced a contract, executed by a solvent purchaser, he is then entitled to pay for his services from the vendor, whether or not the trade is finally consummated; for, if the purchaser refuses to take the property, the vendor holds a contract which renders the purchaser liable for all damages including the commission paid by the vendor to the broker.
Sec. 146. A land owner entered into a written agreement with real estate brokers substantially as follows: "For and in consideration of the services to be performed by........
I hereby employ them as my sole and exclusive agents to sell for me that certain real property, situate in the county of ........, State of........, described as follows." (Description.) "This employment and authority shall continue for the full term of thirty days and thereafter until withdrawn by me in writing; and I agree to pay said......in the event of a sale by them or by anyone else, including myself, while this contract is in force, the sum of $........, as and for their compensation and commission hereunder." After the thirty days had expired, and without withdrawing this authorization, the owner made a sale, and the agents sued for the commission, which was granted by the courts. This land owner also sought to have the contract set aside on the ground of mistake, or fraud, alleging that she did not read the contract in its entirety before signing it; but the court said that a person who has the ability to read, and who fails to read a contract in its entirety before signing will nevertheless be bound by it; nor can such land owner rely upon the statements of the broker as to the contents of the contract, as there is no relation of confidence existing between the owner and the broker. No law has yet been devised which will protect a person from the consequences of his own carelessness or ignorance.
Sec. 147. From the standpoint of equity, and of the agent sharing with the owner the contingencies of sale, the agreement between the vendor and the agent as to commissions should provide for:
(1.) The price at which the agent is to sell and the terms.
(2.) That the owner himself may make a sale without payment to the agent of commission.
(3.) That the agent shall not be entitled to his commission until the transfer has been completed and the money paid over, and shall be payable out of the monies received from the sale of the property; and if such monies be payable in installments, that the commission also be payable in installments.
(4.) That if the deposit made by the purchaser be forfeited to the vendor, the agent's commission shall be calculated only on the amount of such deposit. Form No. 90 seems to meet most nearly the requirements of the average sale.
Sec. 148. An experienced real estate man, who had spent a lifetime in selling farms, once remarked that a neat, well-kept yard added at least five hundred dollars, and sometimes as much as one thousand dollars, to the selling value of a farm. The same is true in a lesser degree of the yards of city lots. The neat, cozy, homelike appearance which prevails around some houses assists greatly towards making a sale, particularly when the wife of the prospective buyer comes to view the premises. The beauty of the ceiling or wall decorations oftentimes tends to make a sale. The chances of making a sale are lessened where the seller has to apologize at every step for the untidy appearance of the interior of the house. A coat of fresh paint on a weather-beaten house vastly improves its appearance, preparatory to a sale.