Real Estate Brokers, Listing & Brokerage Agreements - Real Estate Listing

Does Your Sales Contract Need a Broker? Real Estate Brokerage

A broker is a person who organizes or plans sales or negotiates contracts for others. A broker acts as an intermediary or an agent for entities who wish to buy or sell property, stocks, commodities, or services. Regulations pertinent to agency are applicable to brokers. The person for whom the broker works is the principal and the broker acts as the agent.

A real estate broker acts as an agent of buyers and sellers of real estate and helps buyers to purchase a property or sellers to sell their property. Real estate brokers are engaged to carry out the selling or buying, renting or lease of real property for a commission. Occasionally, real estate brokers advise people who wish to sell or buy property.

A real estate broker may be a commercial real estate broker or a mortgage broker. Commercial real estate brokers work for sellers or buyers by bargaining with them in the selling or buying of goods, without taking personal custody of the property. They work as sales agents or a sales representative for commission. A mortgage broker operates as an agent and helps individuals and businesses to find a direct lender or a bank with a particular loan the individual is looking for.

How to become a real estate broker involves getting licensed. To become a real estate broker, a real estate broker license is essential. To secure a license one must pass a licensing examination. Each state has specific licensing prerequisites. Some states insist on completing a training course before securing a license. In a real estate transaction, dual agency is prohibited by all the states. Dual agency is one in which a single broker represents both the buyer and the seller.

Remuneration of a commercial real estate broker is the commission or fee s/he receives. A licensed commercial real estate broker salary or commission is calculated as a percentage of the total amount of the transaction.

Real estate brokers can seek clients through advertisements. You must have come across homes for sale or house for sale commercials in newspapers or other media. Nowadays, brokers also have online houses for rent or houses for sale commercials on various websites. However, one must be very careful and check the authenticity of the broker and the site.

Before entering into a transaction, a realtor or a real estate brokerage signs a realtor agreement with the person who engages him/her for selling or buying a real estate. When the real estate broker is engaged by a seller, the broker signs a listing agreement with the seller. A real estate listing agreement is an agreement between a seller and a real estate broker granting the broker the right to sell the property. Terms and conditions of the real estate listings and the amount of compensation offered to the broker will be stipulated in the real estate listing form. Compensation may be a percentage of the sales price or a flat fee.

Usually, separate real estate agreements will be executed for different types of transactions. Real estate listing contracts may be:

• an exclusive listing agreement
• an exclusive agent agreement
• a MLS listing agreement

Exclusive listing agreements are formal real estate agreements giving a broker exclusive agency, which is the sole right to rent or to sell a property during a certain period of time. In an exclusive agency agreement, the agent may not act for any other sellers other than the contracted person. In a multiple listing service (MLS) agreement, agent presents multiple offers and the seller accepts whichever offer is most suitable. The commission of the broker will be paid as a percentage of the accepted price.