Ed Brown III, SIOR, CCIM
Buyer/Tenant Agreement

EXCLUSIVE REPRESENTATION AGREEMENT

The undersigned, _________________________________________________________("Client"), hereby employs ______________________________________________("Buyer/Tenant Agency"), to act through _________________________________________________("Buyer/Tenant Agent"), as Exclusive Representative to secure for Client acceptable properties and assist in negotiating terms and conditions acceptable to Client, for the purchase or lease of such properties.

  1. This Agreement shall commence this date and terminate at midnight on __________________. It may be canceled during the term hereof upon five (5) days written notice signed by both parties.

  2. General requirements and purposes of the properties and transactions sought will be outlined by specifications. In the event Client modifies these specifications, Client will notify Buyer/Tenant in writing of the new requirements and/or purposes. These requirements and purposes are informational only in nature and are not a condition of this contract.

  3. The geographic scope of this Agreement contemplates any properties within: ______________  ______________, including the following counties: ________________________________ ________________________________________________________________________.

  4. In consideration of this exclusive right to represent Client, Buyer/Tenant Agency, through  Buyer/Tenant Agent, will pursue diligently the location of acceptable properties and transactions as specified by Client. Any purchase or lease of property by Client during the term of this exclusive right will be subject to the terms of this Agreement.

  5. In consideration of the services to be performed by Buyer/Tenant Agency, Client agrees to compensate Buyer/Tenant Agency as follows:
(a) Success Fee : __________ (% or flat fee) shall be paid by Client. The parties hereby  agree that Buyer/Tenant Agency shall first seek the success fee from the Listing Agent/Seller/Landlord. If there is no Listing Agent, Buyer/Tenant Agency shall first seek the success fee from the Seller/Landlord. Should the fee so obtained be greater than the success fee listed above, Buyer/Tenant Agency shall pay Client the difference at closing.  Should the fee so obtained be less than the success fee listed above, Client shall pay Buyer/Tenant Agency the difference at closing.

(b) Other : (Retainer Fee, Bonus, Incentives, etc.) _______________________________ _____________________________________________________________________

(c) Success fee will be deemed earned when Client is under contract to purchase or lease any property presented by the Buyer/Tenant Agency or found by the Client. This fee will be due and payable at closing or upon execution of a lease, as applicable. If Client defaults in a purchase or lease contract, the total compensation that would have been due the Buyer/Tenant Agency, had the transaction been consummated, will be due and payable immediately in cash from the Client. The provisions of paragraph 6 hereof shall be enforceable as regards this subparagraph.

Buyer/Tenant Agency agrees to act in good faith in determining that compensation is an amount considered reasonable in this area for various types of property transactions.

Buyer/Tenant Agency further agrees to disclose the consideration to be paid to it on all transactions being considered by Client.

Notice: Client understands and acknowledges that there is the potential for a conflict of interest generated by a percentage of price based fee for representing Client. The amount, format or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between Principal and Broker.

  1. In the event that, during the _______________ (______) months following the termination or cancellation of this Agreement, Client consummates a transaction involving property disclosed to him by Buyer/Tenant Agent or a different property from a party introduced to Client by Buyer/Tenant Agent, during the representation period, Client will assure the payment to Buyer/Tenant Agency of the fee provided in paragraph 5 hereof; provided that the names of  prospective properties, owners and other agents are delivered to Client by Buyer/Tenant Agent or postmarked within thirty (30) days after the expiration or cancellation of this agreement. In such event and upon Clientís request, Buyer/Tenant Agent will provide negotiation and closing services to Client in connection with such transaction.

  2. Buyer/Tenant Agency, through Buyer/Tenant Agent, will act as agent on behalf of the Client and will disclose its agency relationship in writing in connection with any transaction hereunder.  Client will cooperate with Buyer/Tenant Agency and Buyer/Tenant Agent in executing a written disclosure of agency in connection with any transaction hereunder.

  3. Client will provide Buyer/Tenant Agency, upon request, relevant personal and financial information to assist Buyer/Tenant Agentís efforts to locate property as outlined.  Client further agrees to view or consider property of the general nature set forth in this Agreement, to negotiate a transaction in good faith if acceptable to Client, and cooperate fully with Buyer/Tenant Agency, including referring to Buyer/Tenant Agent all inquiries and proposals received regarding potential properties. Client will provide Buyer/Tenant Agent with a letter of authorization disclosing Buyer/Tenant Agencyís and Buyer/Tenant Agentís exclusive rights to represent.

THE BROKER SHALL CONDUCT ALL HIS BROKERAGE ACTIVITIES IN REGARD TO THIS AGREEMENT WITHOUT RESPECT TO RACE, COLOR, RELIGION, SEX, NATIONAL ORIGIN, HANDICAP OR FAMILIAL STATUS OF ANY BUYER OR PROSPECTIVE BUYER, SELLER OR PROSPECTIVE SELLER, TENANT OR PROSPECTIVE TENANT, LANDLORD OR PROSPECTIVE LANDLORD.

CLIENT:

BUYER/TENANT AGENCY:

Date: ___________________________________

Date:____________________________________

Individual

___________________________________(SEAL)

________________________________________
(Name of Firm)

___________________________________(SEAL)

By: _________________________________ (SEAL)

Business Entity

________________________________________
(Name of Firm)

By: _______________________________ (SEAL)

 

DESCRIPTION OF AGENT DUTIES AND RELATIONSHIPS

Before you begin working with any real estate agent, you should know who the agent represents in the transaction. Every listing agreement, buyer agency agreement, or other agreement for brokerage services in a real estate transaction in North Carolina must contain this "Description of Agent Duties and Relationships" [N.C. Real Estate Commission Rule 21 NCAC 58A.0104(c), eff. 7/1/95] . Real estate agents should carefully review this information with you prior to entering into any agency agreement.

AGENTS' DUTIES

When you contract with a real estate firm to act as your agent in a real estate transaction, the agent must help you obtain the best price and terms possible , whether you are the buyer or seller. The agent also owes you the duty to:

  • Safeguard and account for any money handled

  • Be loyal and follow reasonable and lawful instructions.

  • Act with reasonable skill, care and diligence.

  • Disclose to you any information which might influence your decision to buy or sell

Even if the agent does not represent you, the agent must still be fair and honest and disclose to you all "material facts" which the agent knows or reasonably should know.  A fact is "material" if it relates to defects or other conditions affecting the property, or if it may influence your decision to buy or sell. This does not require a sellerís agent to disclose to the buyer the minimum amount the seller will accept, nor does it require a buyerís agent to disclose to the seller the maximum price the buyer will pay.

AGENTS WORKING WITH SELLERS

A seller can enter into a "listing agreement" with a real estate firm authorizing the firm and its agent(s) to represent the seller in finding a buyer for his property.  The listing agreement should state what the seller will pay the listing firm for its services, and it may require the seller to pay the firm no matter who finds the buyer.

The listing firm may belong to a listing service to expose the sellerís property to other agents who are members of the service.  Some of those agents may be working with buyers as buyerís agents; others will be working with buyers but still representing the sellersí interests as an agent or "subagent."  When the buyerís agents and sellerís subagents desire to share in the commission the seller pays to the listing firm, the listing agent may share the commission with the sellerís permission.

AGENTS WORKING WITH BUYERS

A buyer may contract with an agent or firm to represent him (as a buyerís agent ) or may work with an agent or firm that represents the seller (as a sellerís agent or subagent ).  All parties in the transaction should find out at the beginning who the agent working with the buyer represents.

If a buyer wants a buyerís agent to represent him in purchasing a property, the buyer should enter into a "buyer agency agreement" with the agent.  The buyer agency agreement should state how the buyerís agent will be paid.  Unless some other arrangement is made which is satisfactory to the parties, the buyerís agent will be paid by the buyer .  Many buyer agency agreements will also obligate the buyer to pay the buyerís agent no matter who finds the property that the buyer purchases.

A buyer may decide to work with a firm that is acting as agent for the seller (a sellerís agent or subagent ).  If a buyer does not enter into a buyer agency agreement with the firm that shows him properties, that firm and its agents will show the buyer properties as an agent or subagent working on the sellerís behalf.  Such a firm represents the seller ( not the buyer) and must disclose that fact to the buyer.

A sellerís agent or subagent must still treat the buyer fairly and honestly and disclose to the buyer all material facts which the agent knows or reasonably should know.  The sellerís agent typically will be paid by the seller.  If the agent is working as agent for the seller, the buyer should be careful not to give the agent any information that the buyer does not want the seller to know .

DUAL AGENTS

A real estate agent or firm may represent more than one party in the same transaction only with the knowledge and written consent of all parties for whom the agent acts.  "Dual Agency" is most likely to occur when a buyer represented by a buyerís agent wants to purchase a property listed by that agentís firm.  A dual agent must carefully explain to each party that the agent and the agentís firm are also acting for the other party.

In some situations, the agents may practice a form of dual agency known as "designated agency:" an agent in a firm is designated to represent the interests of the seller, and another agent in the same firm is designated to represent the interests of the buyer.  This form of dual agency allows the designated agent to more fully represent the interests of the party with whom the agent is working.

In any dual agency situation, the agent must obtain a written agreement from the parties which fully describes the obligations of the agent and the agentís firm to each of them.


This firm represents both sellers and buyers.  This means that it is possible that a buyer we represent will want to purchase a property owned by a seller we represent.  When that occurs, the agent and firm listed above will act as dual agents if all parties agree.


Ed Brown III, SIOR, CCIM
INNOVATION, PERFORMANCE, INTEGRITY
ebrown@naicarolantic.com for more information

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