Executing an “Exclusive Authorization and Right to Sell” agreement with a broker does not create the authority in the broker to sell the property by binding the seller to a purchase contract with a buyer. It is merely the authority to invite or procure prospective purchasers. See Holway v. Malloy, (1945) 70 Cal. App.2d 317, 319 (“Authority given to a broker ‘to sell’ real property, in listing it for sale, only authorizes him to find a purchaser; it relates to the services to be performed by the agent in order to earn the agreed compensation and does not make him the agent of the owner to enter into a contract of sale. This is a well established canon of the law of real property.”) Thus, the listing agreement only confers a right to bring buyers to the table, not to bind the buyer and seller to a deal.
If you are a seller or buyer of real estate, or if you are an agent or broker and have a question regarding a real estate transaction or deal, contact one of our Los Angeles Real Estate Attorneys for a free consultation and case evaluation. Our Real Estate Attorneys are also licensed California Real Estate Brokers. (888) 693-5556.