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A Real Estate Agent Agreement is a document used by a real estate Agent to provide services necessary to market and sell a Client's property. Under this Agreement, the Agent is an independent contractor with respect to the Client and not an employee of the Client. The Agent acts as an intermediary between the Client selling their property and potential buyers of that property. Real estate Agents assist, arrange, and direct the marketing, advertising, and staging of the property and then negotiating and selling it for the highest possible price under the terms most favorable to the Client.
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Though similar to the Broker Agreement, the two documents are used for different purposes. A Broker Agreement is used to set forth the terms and conditions under which a Broker will either find goods and/or services for a buyer to purchase or interested buyers for goods and/or services being sold by a seller. A Real Estate Agent Agreement is used to set forth the terms and conditions under which a real estate Agent will sell real property to a buyer on behalf of their Client.
How to use this document
This document includes all of the information necessary to create a comprehensive Real Estate Agent Agreement. This Agreement can be created by either the Agent or the Client but must be agreed to and signed by both Parties. The document includes various options to tailor the Agreement to meet the Parties' needs. The Agreement allows the Parties to specify the following important details that will guide the business relationship:
- Name and contact information for both Parties, as well as the names of any representatives who may sign the Agreement on behalf of either Party
- Responsibilities that must be fulfilled by each Party under this Agreement, including advertising, marketing, staging, and showing the property
- Payment arrangement dictating how and when the Agent will be compensated for their work and/or reimbursed for any out of pocket expenses they may have incurred in connection with performing on this Agreement
- Length of the Agreement and when and how the Agreement will terminate
After inputting the required information, the Agreement is printed out and signed by both Parties, and then kept on file by both Parties for the duration of the Agreement as well as for a reasonable period of time thereafter. Once the Parties have completed the Agreement, they can be confident that the Agent will focus on marketing and selling the Client's property for the highest possible price under terms most favorable to the Client.
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Real Estate Agent Agreements in the United States are subject to both federal laws and specific state laws, which cover general contract principles like formation and mutual understanding. Relevant to federal law, the Internal Revenue Service ('IRS') has very strict guidelines concerning whether a person providing services is an employee or an independent contractor. Frequently, businesses attempt to make their associations with workers 'independent contractor' relationships so that they are not obligated to provide employee benefits or to withhold employee payroll taxes. Real estate Agents usually work as independent contractors for the Clients they serve and this Agreement is structured to follow the guidelines provided by the IRS on this topic. On a state level, almost all states require that a real estate Agent be certified and/or registered as an Agent in order to provide their services. The qualifications and requirements to become properly registered differ state by state and should be consulted to make sure the Agent has been properly registered under their state's laws.
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