A realtor representation agreement is a contract between a real estate agent and a client, outlining the terms of their working relationship. This document is important for both parties as it establishes mutual expectations, obligations, and the scope of the agent’s representation.
Here are some key points to keep in mind when drafting or reviewing a realtor representation agreement:
1. Agency relationship: The agreement should specify whether the agent is representing the buyer, seller, or both. This determines the extent of the agent’s fiduciary duty, or obligation to act in the best interest of their client. If the agent is representing both parties, the agreement should state that they will act as a facilitator and remain neutral.
2. Duration: The agreement should include the start and end date of the representation. This ensures that both parties are aware of when the arrangement will expire and can plan accordingly.
3. Commission and fees: The agreement should outline the commission or fee structure and how it will be paid. This includes the percentage of the sale price that the agent will receive as well as any additional fees such as marketing expenses. The agreement should also specify who pays the commission and under what circumstances.
4. Scope of representation: The agreement should specify the geographic area and type of property that the agent is authorized to represent the client for, as well as any specific tasks or services they will provide. This includes items like property searches, showing homes, and negotiating offers.
5. Termination: The agreement should include the circumstances under which either party can terminate the agreement, as well as the notice required for termination.
6. Disclosure: The agreement should require the agent to disclose any conflicts of interest and previous relationships they have had with the clients. This ensures that the client is aware of any potential biases or connections that could compromise the agent’s ability to act in their best interest.
Overall, a realtor representation agreement is an important document that establishes the terms of the relationship between an agent and their client. Ensuring that it is comprehensive and clear can help prevent misunderstandings and protect both parties from potential disputes. If you are in need of a real estate agent, make sure you review and sign a realtor representation agreement before beginning to work together.