The Broker's Fee Agreement serves as a fundamental document in U.S. real estate and business transactions, establishing clear terms for broker compensation and services. This agreement is essential when engaging a licensed broker for property sales, purchases, or business transactions. It protects both parties by clearly defining commission structures, payment triggers, and service expectations while ensuring compliance with state and federal regulations. The document typically includes provisions for exclusive or non-exclusive representation, protection periods, and specific performance metrics.
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1. Parties: Identification of the broker and client, including full legal names, addresses, and licensing information
2. Background: Context of the brokerage relationship and purpose of the agreement
3. Definitions: Key terms used throughout the agreement including 'Commission', 'Property', 'Transaction', and 'Exclusive Period'
4. Scope of Services: Detailed description of broker's services, responsibilities, and obligations
5. Fee Structure: Commission rates, payment terms, and conditions for earning fees
6. Term and Termination: Duration of agreement, renewal terms, and conditions for early termination
7. Representations and Warranties: Standard commitments from both parties regarding authority, compliance with laws, and licensing
8. Governing Law: Specification of applicable state law and jurisdiction
1. Dual Agency Provisions: Terms governing situations where broker represents both parties in a transaction
2. Protection Period: Terms defining broker's rights to commission for post-termination transactions with introduced clients
3. Marketing Commitments: Specific marketing obligations and activities the broker will undertake
4. Dispute Resolution: Procedures for handling disputes, including mediation and arbitration provisions
1. Schedule A - Fee Schedule: Detailed breakdown of commission structures and payment terms
2. Schedule B - Service Level Agreement: Detailed listing of specific services to be provided by the broker
3. Schedule C - Property Schedule: List of properties covered by the agreement (if applicable for exclusive listings)
4. Schedule D - Required State Disclosures: State-mandated disclosures and forms
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