Final answer:
Prospective sellers need to be informed about the broker's fee division with other brokers, the commission rate for the transaction, and that the buyer's broker compensation is negotiable before entering into a listing contract.
Step-by-step explanation:
When entering into a listing contract, prospective sellers should be informed about several key financial aspects. First, it is important to explain how the broker's fee will be split with other brokers. This usually involves a discussion about the listing broker's commission and how it is divided if another broker brings in a buyer. Second, the broker's commission rate for the transaction should be clearly laid out and agreed upon, as this affects the seller's net proceeds from the sale. Finally, it should be made clear that compensation for the buyer's broker is negotiable. Negotiating this term can affect the attractiveness of the listing to buyers' agents. Therefore, all of the above options should be thoroughly explained to a prospective seller before a listing contract is signed.