Real Estate Broker Fee Agreement Template

A real estate broker fee agreement is a legally binding document that outlines the terms and conditions under which a real estate broker will represent a client in a property transaction. This agreement is crucial in establishing a clear understanding between the broker and client regarding the scope of services, compensation, and responsibilities.

Key Components of a Real Estate Broker Fee Agreement

1. Parties Involved

The agreement should clearly identify the parties involved in the transaction:

Client: The individual or entity seeking representation from the broker.

Broker: The licensed professional who will be providing real estate services.

2. Property Description

The agreement should provide a detailed description of the property, including:

Address: The complete address of the property.

Type of Property: Residential, commercial, or industrial.

Legal Description: A precise legal description of the property.

3. Scope of Services

The agreement should outline the specific services that the broker will provide, such as:

Listing: Marketing the property for sale or lease.

Showings: Accompanying potential buyers or tenants to view the property.

Negotiations: Representing the client’s interests in negotiations with buyers or tenants.

Contract Preparation: Assisting in the preparation of purchase or lease agreements.

Closing: Overseeing the closing process and ensuring that all necessary documents are signed.

4. Broker’s Commission

The agreement should clearly state the broker’s commission and how it will be calculated. Common methods of calculating commission include:

Percentage of Sales Price: A percentage of the final sale price of the property.

Flat Fee: A fixed amount regardless of the sale price.

Negotiated Fee: A fee that is negotiated between the broker and client.

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5. Payment Terms

The agreement should specify when and how the broker’s commission will be paid. This may include:

Due Upon Closing: The commission is due upon the successful closing of the transaction.

Partial Payment at Contract Signing: A portion of the commission is due at the time the purchase or lease agreement is signed.

Other Payment Arrangements: Other payment arrangements that may be agreed upon by the parties.

6. Termination Clause

The agreement should include a termination clause that outlines the conditions under which either party can terminate the agreement. This may include:

Mutual Agreement: Both parties agree to terminate the agreement.

Breach of Contract: One party breaches the terms of the agreement.

Expiration of Term: The agreement expires after a specified period of time.

7. Dispute Resolution

The agreement should specify how disputes between the parties will be resolved. This may include:

Mediation: A neutral third party will attempt to facilitate a settlement.

Arbitration: A neutral third party will make a binding decision.

Litigation: The parties will resolve the dispute through the court system.

8. Governing Law

The agreement should specify the governing law that will apply to the agreement. This will determine the jurisdiction in which any disputes will be heard.

9. Entire Agreement

The agreement should include a clause stating that it constitutes the entire agreement between the parties and supersedes any prior or contemporaneous communications.

10. Signatures

The agreement should be signed by both the client and the broker to make it legally binding.

Design Considerations for a Professional Real Estate Broker Fee Agreement Template

Clear and Concise Language: Use simple, easy-to-understand language that avoids legal jargon.

Professional Layout: Use a clean and professional layout with consistent formatting.

Easy-to-Read Font: Choose a font that is easy to read and visually appealing.

White Space: Use ample white space to improve readability and make the document visually appealing.

Headings and Subheadings: Use headings and subheadings to organize the information and make it easier to navigate.

Numbering and Bullets: Use numbering and bullets to create a clear and organized structure.

By following these guidelines, you can create a professional real estate broker fee agreement template that effectively protects the interests of both the client and the broker.