Agreement between Brokers Sample

Agreement between Brokers Sample: A Guide for Real Estate Professionals

In the world of real estate, brokers play a vital role in connecting buyers and sellers, guiding transactions, and ensuring that everything runs smoothly. When two brokers collaborate to close a deal, they often enter into an agreement to clarify their responsibilities and expectations. This is known as an agreement between brokers or co-brokerage agreement. In this article, we’ll take a closer look at what a co-brokerage agreement entails, and provide a sample template that you can use as a starting point.

What is a Co-Brokerage Agreement?

A co-brokerage agreement sets out the terms and conditions for a collaboration between two brokers. It outlines their roles and responsibilities in a transaction and specifies the commission split that each broker will receive upon the sale of a property. The agreement also typically includes provisions related to confidentiality, client representation, and dispute resolution.

Why is a Co-Brokerage Agreement Important?

A co-brokerage agreement is important because it provides clarity and certainty in a collaborative relationship. It establishes a clear understanding between the brokers about their respective roles and what each party is entitled to in terms of compensation. Without this agreement, disputes over commissions and other matters could arise, leading to delays and potential legal action.

What Should be Included in a Co-Brokerage Agreement?

While the specific terms of a co-brokerage agreement may vary depending on the circumstances of a particular transaction, there are several key components that should be included. These include:

1. Names and Addresses of the Brokers – This section should clearly identify the collaborating brokers and their addresses.

2. Property Information – This section should identify the property being sold, and any relevant details such as the listing price, commission rate, and estimated closing date.

3. Commission Split – This section should specify how the commission will be divided between the two brokers, and what percentage each party will receive.

4. Confidentiality – This section should include provisions that protect the confidentiality of client information, including what information may be shared and what information is considered confidential.

5. Representation – This section should specify whether each broker is representing a buyer, a seller, or both. It should also include provisions that clarify the responsibilities of each party in relation to representation.

6. Dispute Resolution – This section should outline how disputes will be resolved between the brokers, including whether mediation or arbitration is required.

Sample Co-Brokerage Agreement

To help you get started, here is a sample co-brokerage agreement that you can use as a starting point:

[Insert Company Name or Letterhead]

Agreement Between Brokers

This agreement is entered into by and between [Insert Broker Name and Address] and [Insert Broker Name and Address] for the purpose of co-brokering the sale of real estate property located at [Insert Property Address].

Commission Split

The total commission earned on the sale of the property will be divided equally between the two brokers, with each broker receiving 50% of the commission. The commission shall be calculated based on the gross sales price of the property.

Confidentiality

Both brokers will maintain the confidentiality of any information regarding the seller, buyer, or the property, except as necessary to facilitate the transaction.

Representation

[Insert Broker Name and Address] is representing the seller in this transaction, while [Insert Broker Name and Address] is representing the buyer.

Dispute Resolution

Any disputes that arise between the brokers in relation to this agreement shall be resolved through mediation or arbitration.

Agreement and Signature

Each broker acknowledges that they have read and understood the terms of this agreement, and agree to be bound by its terms. This agreement shall be effective immediately upon signing by both parties.

[Insert Broker Name and Signature] [Insert Broker Name and Signature]

Date: Date:

Conclusion

In conclusion, a co-brokerage agreement is an essential tool for real estate professionals, particularly when collaborating on complex transactions. By setting out clear expectations and responsibilities, a co-brokerage agreement can help ensure that a transaction proceeds smoothly and that all parties are fairly compensated. While the specific terms of the agreement may vary depending on the transaction, using the sample template provided above can give you a solid foundation from which to build.