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Vocabulary flashcards covering key terms related to real estate brokerage agreements, agency relationships, and compensation.
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Brokerage Agreement
An employment contract that establishes the agency relationship between a client and a real estate broker for the purpose of buying, selling, leasing, or managing property.
Listing Agreement
A written agency contract between a seller and a broker stating the broker will be paid a commission for finding (or attempting to find) a buyer for the seller’s property.
Exclusive Right to Sell Listing
A listing where the broker earns commission if anyone—including the seller—finds a buyer during the listing term.
Exclusive Agency Listing
A listing where the broker earns commission only if someone other than the seller procures the buyer during the listing term.
Open Listing
A non-exclusive listing given to multiple brokers; only the broker who is the procuring cause of the sale earns commission.
Net Listing
A compensation method in which any sale price above a seller-specified net amount becomes the broker’s commission; illegal or discouraged in many states.
Multiple Listing Service (MLS)
A cooperative listing service where member brokers share property listings and agree to split commissions on jointly sold properties.
Buyer Agency Agreement
An employment contract between a buyer and a broker granting the broker the right to represent the buyer and outlining the buyer’s obligation to pay commission.
Exclusive Buyer Agency Agreement
A buyer contract in which the broker is paid the negotiated fee even if the buyer purchases through another broker or alone.
Exclusive Agency Buyer Agency Agreement
A buyer contract where the broker is paid only if that broker finds the property the buyer ultimately purchases.
Non-Exclusive (Open) Buyer Agency Agreement
A buyer contract allowing multiple brokers; commission is earned only by the broker who introduces the buyer to the property purchased.
Tenant Agreement
A brokerage contract that creates an agency relationship in which a broker finds rental property for a tenant.
Property Management Agreement
A written agreement detailing the authority, duties, and compensation of a property manager acting for a landlord.
Fair Housing Statement
Contract clause acknowledging that discrimination based on race, color, religion, national origin, sex, disability, or familial status is prohibited.
Offer of Cooperation
A statement in a listing or MLS specifying the amount of commission a listing broker will pay a cooperating or buyer’s broker.
Broker Protection Clause (Extender Clause)
Clause requiring a seller to pay commission if the property sells to a buyer introduced during the listing term, even after the agreement expires.
Commission
Compensation paid to a broker, typically a percentage of the sales price, negotiated in a written brokerage agreement.
Commission Split
The percentage breakdown of commission between a broker and affiliated licensee, such as 60/40, stated in an employment agreement.
Cooperating Broker / Agent
A broker who assists the listing broker in a transaction, often earning a share of the commission for bringing the buyer.
Procuring Cause
The uninterrupted series of events initiated by an agent that directly results in a real estate sale or lease.
Referral Fee
Compensation paid from one employing broker to another for directing a client to a real estate agent in that brokerage.
Dangling Commission
Commission a licensee may receive from a former broker if earned while licensed with that broker and permitted by their agreement.
Arbitration
A dispute-resolution process where parties submit evidence to an impartial third party instead of going to court.
Compensation
Valuable consideration given in exchange for performing real estate brokerage services; includes commissions, flat fees, hourly rates, or other payment forms.
Commission Schedule (Blended Rate)
A negotiated structure where the commission percentage decreases as the sale price increases, producing a blended overall rate.
Employment Broker
The principal broker who owns all brokerage contracts and compensates affiliated licensees; sometimes called the employing broker.
Revocation of Brokerage Contract
Action by a client to terminate a brokerage agreement before expiration; may constitute breach and create liability for damages.
Ready, Willing, and Able Buyer
A buyer who meets all seller terms and can complete the purchase, triggering commission liability to the listing broker.
Brokerage
A business entity licensed to act as an intermediary between buyers and sellers or landlords and tenants of real estate.