Commercial Real Estate Commission Agreement Template free printable template

What is a Commercial Real Estate Commission Agreement?

• Defines the compensation expectations, obligations, and the duration of the relationship between the broker and the client.
• A well-structured agreement protects all parties involved by preventing misunderstandings that can lead to disputes.

Who are the Key Parties Involved?

• The broker acts as the intermediary in the transaction. Their role includes marketing the property, conducting negotiations, and ensuring compliance with regulations.
• The client is the individual or entity that hires the broker, typically the property seller or lessor, responsible for understanding the commission agreement.
• Refers to the real estate at the center of the agreement, which can range from commercial buildings to undeveloped land.
• This is the payment to the broker, calculated as a percentage of the sale or lease price of the property, stipulated within the agreement.
• The act of formally representing the property in question, legally binding the broker to act on behalf of the client.

What are the Engagement Terms?

• Typically, the agreement specifies the time frame during which the broker has exclusive rights to sell or lease the property.
• Conditions under which either party may terminate the agreement before its expiration should be established.
• A comprehensive list of obligations such as marketing efforts, showings, and client communications.

What Services are Included?

• This includes utilizing various channels such as online platforms and MLS (Multiple Listing Service) to boost visibility.
• The broker facilitates viewings, providing potential buyers or lessees an opportunity to explore the property.
• The broker is responsible for representing the client's interests during negotiations to achieve favorable terms.
• Clients should expect periodic reports regarding marketing activity, offers, and feedback from potential buyers.
• Brokers often assist in drafting necessary transaction documents to ensure compliance and thoroughness.
• Guiding clients through the closing process can help prevent legal complications at the transaction's end.

How are Commission Terms Defined?

• Typically expressed as a percentage of the final sale or lease price, this figure is agreed upon in the contract.
• This specifies when the broker's commission will be paid, usually upon the successful completion of a sale or lease.
• The agreement should include provisions for resolving disputes that may arise regarding commission calculations or payments.

What is the Exclusivity Clause?

• Grants the broker the sole right to market the property, often increasing their motivation to secure sales.
• Clients should consider how exclusivity might limit their flexibility in choosing different brokers or exploring other selling avenues.
• Clients might prefer non-exclusive arrangements, which allow them to engage multiple brokers simultaneously.

How is the Agreement Terminated?

• Specific actions or conditions, such as breaches of conduct or failure to sell, can trigger early termination.
• Both parties typically must adhere to stipulated procedures for formally terminating the agreement.
• The agreement outlines how outstanding commissions will be addressed in case of termination.

What are the Legal Considerations?

• Signatures validate the agreement and denote that both parties accept the terms detailed within.
• Platforms like pdfFiller facilitate the eSignature process, allowing users to sign their agreements digitally.
• Ensure that the agreement meets all governing regulations and legal standards in your region.