Time is a valuable asset for everyone nowadays, if one wants to buy or sell anything he owns, doesn’t goes in the market as door to door for his advertisement or purchase, or stand in a long queue for his turn, he rather hires a broker or an agent who is knowledgeable, has skillset and links in the field to fulfill his requirement. There are various types of agreement between Purchaser and broker, here we will talk about the agreement related to property. This agreement is between the Purchase, broker and the agent. Further there are three bifurcations in the agreement types.
Types
- Non-exclusive right to representation & not for compensation agreement – This is the agreement between Purchaser, broker and agent. The broker/agent are bound with duties and obligations to the purchaser under the agreement and does not provide compensation.
- Purchaser has the right to appoint an agent or broker for the search of property
- Purchaser under this type of agreement is not liable for any kind of compensation
- Purchaser can appoint one or more than one broker for their representation.
- Broker is under obligation for searching of property for the purchaser.
- Duty of the broker is implemented by the agent hired.
- Either party has the right to revoke this contract.
- Non- exclusive right to representation -- This is the agreement between Purchaser, broker and agent. The broker/agent are bound with duties and obligations to the purchaser under the agreement and also provide compensation. This agreement makes purchaser free from paying the commission to broker/agent if the same is paid by the other party or seller.
- Purchaser has the right to appoint an agent or broker for the search of property.
- Purchaser can appoint the sole agency or more than one agent/broker.
- Broker’s/agent’s payment of commission can be done either by both the parties or if done by the seller party alone then the purchaser is set free from the payment of the same.
- The seller party can pay more commission to broker/agent than that stated in the agreement by his own will.
- Exclusive and the right to representation – This agreement includes the involvement of purchaser with the broker/agent for the search of the property.
- Purchaser has the right to appoint an agent or broker for the search of property.
- Purchaser can appoint only single broker/agent.
- Purchaser is not liable for the extra-commission if already paid by the other party (seller).
- The seller party can pay more commission to broker/agent than that stated in the agreement by his own will.
Advantages
- Broker or agent will represent the purchaser, who can understand the best of purchaser’s needs.
- Broker or agent will be in the authority to provide a deal for purchaser and seller party.
- Purchaser will get the agency who will help him in searching property as per the best of his interest.
- Where Purchaser without the help of broker may get limited options fulfilling his needs, here by this agreement broker will provide variety of options through his links.
- Purchaser will have to face less problem, as everything will be managed by the broker.
Details required in the agreement
- Name of Party (either purchaser or seller), broker, and agent (not necessary).
- Specify Broker’s firm under which he works, with complete details.
- Services provided by the Broker’s to the parties.
- Commission/charges of the Broker receiving from the party or parties (purchaser and seller), that includes negotiation, date of getting the pay.
- Licenses and qualifications of broker required to handle the care of this agreement and needs of the party.
- All the important law (Federal, state and industry specific laws) to bind the party and the broker within this agreement and their specific role.
- Other terms and conditions.
Termination of Agreement
- By the breach of the agreement
- Reason: No fulfilment of terms and conditions of the agreement.
- Non-satisfaction leads to termination
- Reason: If the party is not satisfied with the service of the broker, if this condition of termination is specified in the clause of agreement.
- By mutual decision of purchaser and broker
- Reason: if the broker and purchaser are not comfort with terms of each other can begin with the termination of agreement.
- After the completion of the terms and services of the agreement.
- Reason: when both parties are satisfied with the service of broker and completed the purchase of the property, then as per the basic need of this agreement terminates.
- Payment issues leads to termination of agreement
- Reason: if the broker demands for extra pay or party ignores for the payment of the broker than this may lead to terminate the agreement.