When entering into a brokerage agreement, it is crucial to have a clear understanding of the terms and conditions being agreed upon by both parties. A well-drafted brokerage agreement should outline the roles and responsibilities of the broker and the client, as well as provide a framework for disputes and termination of the agreement.
To help you navigate the process of creating a brokerage agreement, we have put together a sample agreement to serve as a guide.
Introduction
The introduction to the agreement should clearly outline the parties involved, including the name and contact information for the broker and client. It should also provide a brief overview of the purpose of the agreement and the services the broker will provide.
Services to Be Provided
The services section of the agreement should provide a specific list of the services the broker will perform for the client. This can include tasks such as marketing the property, finding potential buyers or tenants, negotiating leases or contracts, and handling administrative tasks such as paperwork and record-keeping.
Compensation
The compensation section should outline how the broker will be paid for their services. This can include a percentage of the sale or lease price, a flat fee, or a combination of both. It should also specify when payment is due and any additional costs or fees that may be incurred.
Duration and Termination
The duration section of the agreement should specify how long the agreement will last and when it can be renewed or terminated. It should also outline the circumstances under which the agreement can be terminated by either party, such as a breach of contract or failure to perform.
Confidentiality and Non-Disclosure
To protect the interests of both parties, a confidentiality and non-disclosure clause should be included in the agreement. This section should specify the types of information that are considered confidential and outline the steps both parties will take to protect this information.
Dispute Resolution
In the event of a dispute, the agreement should specify how the parties will attempt to resolve the issue. This can include mediation, arbitration, or litigation.
Conclusion
A well-drafted brokerage agreement can help protect both the broker and client by clearly outlining the terms and conditions of the agreement. By using this sample agreement as a guide, you can ensure that your agreement includes all the necessary components and is tailored to your specific needs.