In Georgia, there are certain types of brokerage engagement agreements that are against the law. As a professional, it is important to understand the legal landscape in the state of Georgia when it comes to real estate.
One type of brokerage engagement agreement that is illegal in Georgia is known as a net listing. A net listing is an agreement in which the broker agrees to sell the property for a specific amount, and any proceeds above that amount are the broker`s commission. This type of agreement is considered unethical because it creates a conflict of interest for the broker. The broker may be inclined to sell the property for less than its market value in order to maximize their commission.
Another type of brokerage engagement agreement that is illegal in Georgia is a dual agency agreement. A dual agency agreement is when a broker represents both the buyer and the seller in a transaction. This type of agreement is considered unethical because it creates a conflict of interest for the broker. The broker may be inclined to promote the interests of one party over the other, which is a violation of their fiduciary duty.
Finally, Georgia law prohibits any brokerage engagement agreement that requires the seller to list their property exclusively with one broker for a period of more than 90 days. This type of agreement is known as an exclusive listing agreement, and it is considered unethical because it limits competition among brokers. Brokers are required to compete fairly for listings, and an exclusive listing agreement can prevent this from happening.
In conclusion, as a professional, it is important to understand the types of brokerage engagement agreements that are illegal in Georgia. A net listing, a dual agency agreement, and an exclusive listing agreement for more than 90 days are all illegal in the state of Georgia. Brokers should always strive to act in the best interests of their clients and comply with all applicable laws and regulations.