What Is a Real Estate Broker Agreement?

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By:Mark Warner

When it comes to buying and selling a home, the average person has many more options available to them today than they did just a few short decades ago. It wasn't that long ago that the only option you had was to enlist the help of a certified broker who could help you buy or sell a home. Today, thousands of people every year buy and sell homes on their own, although many brokers will tell you this practice isn't for the faint of heart. If you decide to take the traditional route of hiring a broker, you will need a real estate broker agreement. Let's take a look at how these agreements work and what you're getting yourself into when you sign one.

Before you put your John Hancock on a real estate broker agreement, you need to make sure that you feel completely comfortable with the real estate agent you've found. It may not sound like a big deal, but finding the right broker is very important. You need to find someone who you feel comfortable with and someone who understands exactly what you're looking for in a new home. Once you've signed your agreement, there is no turning back, so make sure you think it through before you sign.

There are three different types of agreements you can enter into with your real estate broker: an open listing, an exclusive agency listing and an exclusive right to sell listing.

An open listing is just that, open. It basically means that the owner of the home has agreed to sell the home themselves and you may enter into several open listing agreements with several different real estate agents and only reward the one that actually manages to sell your home for you. With this type of agreement, the owner of the home is essentially unrepresented. While this isn't a recommended method of selling a home if this is your first time around the block, it can save you significant fees down the road if you can handle all of the heavy lifting yourself. When your home is finally sold, the total amount of fees you will have to pay will be much less than the other types of agreements.

With an exclusive agency listing, the owner of the home is officially represented by the agency they have the agreement with. This means that the final fees you will have to be will be greater, but it also means that you have someone working in your best interest that can be a huge boost if you've never played the home selling game before.

Finally, the exclusive right to sell listing is the most common type of listing that people use. This means that the broker you have the agreement with is the only broker that can earn the home selling commission that you will pay when your home is sold. The owner of the home gives up the right to sell the home themselves, but it is also considered the "safest" way to sell your home.

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Mark Warner is a Legal Research Analyst for RealDealDocs.com. RealDealDocs gives you insider access to millions of legal documents drafted by the top law firms in the US. Search over 10 million http://www.RealDealDocs.com">Documents, Clauses, and Legal Agreements for Free at http://www.RealDealDocs.com.