1. Scope of broker’s duties
- This pivotal section elucidates the specific obligations that the agent will undertake throughout the marketing process.
- Clearly outline the tasks and responsibilities the broker will undertake in marketing the property.
- Specify details like property listing creation, showings, negotiations, and communication with potential buyers/tenants.
2. Owner’s and broker’s expenses
- In these segments, the agreement spells out which expenditures will be covered by each party, delineating financial responsibilities.
- Define which expenses will be covered by the property owner and which will be covered by the broker.
- Address expenses related to marketing materials, staging, photography, and any other property promotion costs.
3. Budget
- This section elucidates the marketing budget’s timing, preparation, and approval.
- Set a marketing budget that covers various promotional activities.
- Discuss how the budget will be managed, including obtaining owner approval for certain expenses.
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4. Disbursement of funds
- This segment meticulously outlines the mechanisms and timing for the distribution of funds.
- Specify how funds will be disbursed for marketing expenses.
- Define the process for reimbursing expenses and how any leftover funds will be handled.
5. Employees
- This section offers insight into the hiring and termination of employees, clearly defining the accountable party.
- If applicable, outline the roles and responsibilities of any employees involved in the marketing process.
- Clarify whether the broker’s team or the property owner’s team will handle certain tasks.
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6. Compensation of the broker
- This substantial portion offers a detailed breakdown of the remuneration structure for various broker services.
- Discuss the broker’s compensation structure for their services.
- Address base fees, commission percentages, bonuses for achieving specific goals, and any “golden handcuff” incentives for successful deal completion.
7. Term of agreement
- Clearly articulating the agreement’s commencement and conclusion dates, this section might also address any potential extensions.
- Determine the duration of the agreement, specifying the start and end dates.
- Consider including provisions for automatic renewal if both parties agree.
8. Termination
- To preempt potential disputes, the agreement should comprehensively outline the circumstances leading to early termination and associated events.
- Clearly define the circumstances under which either party can terminate the agreement.
- Include notice periods and any potential penalties or fees associated with early termination.
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9. Accounting
- Defining ongoing accounting management in case of early termination ensures the process is addressed efficiently.
- Address how financial records and accounting related to marketing expenses and commissions will be maintained and shared.
10. Purchaser or tenant deposits
- Guiding the placement of deposits, it is prudent to ensure that segregated escrow accounts are used, preventing mingling with the broker’s regular operational funds.
- If applicable, outline the process for handling purchaser or tenant deposits.
- Specify how these deposits will be managed, held, and potentially refunded.
11. Insurance
- This component mandates the broker to maintain a specific level of liability insurance coverage.
- Discuss insurance coverage for the property and any liability during the marketing period.
- Determine who is responsible for maintaining insurance and mitigating risks.
12. Review of offers and negotiations
- Clarify how the broker will present offers and facilitate negotiations with potential buyers or tenants.
- Discuss the owner’s role in accepting or countering offers.
13. Confidentiality and non-disclosure
- Include clauses that ensure the confidentiality of sensitive information shared during marketing.
14. Intellectual property rights
- Address the ownership of marketing materials, photos, videos, and other promotional content created during the agreement.
15. Legal compliance
- Specify that all marketing activities will be conducted in compliance with relevant laws, including fair housing regulations and advertising standards.
16. Governing law and dispute resolution
- Determine which jurisdiction’s laws will govern the agreement.
- Outline the process for resolving any disputes that may arise during the agreement.