Contract Draft Template:

● Florida-Buyer-Broker-Agreement.pdf - FLORIDA ASSOCIATION OF REALTORS®

● Creating a draft from scratch similar to eForms and extracting the personal information
through Claire. Type of Agreement:
○ Exclusive - Whether the Buyer finds a property through the Agent or not, a
commission is due.
○ Non-Exclusive - If the Buyer finds a property without the help of the Agent, no
commission is due

EXCLUSIVE AGREEMENT

Are the contracts usually legally binding?

These contracts are considered legally binding because it meets several key criteria that are
generally required for a contract to be enforceable by law:

Criteria for Legal Explanation in Context of Agreement

Binding

Mutual Consent Both parties have willingly signed the agreement, indicating mutual consent.

Offer and Acceptance The agreement represents a clear offer by the Buyer and acceptance by the Broker.

Consideration The Buyer provides a retainer fee (if applicable), and the Broker provides professional services.

Capacity Parties entering the contract are presumed to be of legal age and mentally competent.

Lawful Purpose The contract is for the legal service of real estate acquisition, which is a lawful activity.

Clear Terms The contract specifies the obligations, services, compensation, and duration.

Written Form The agreement is in writing and signed by both parties, meeting the requirement of the Statute of
Frauds for real estate transactions.

How Contracts are Terminated?

● Expiration: The contract may have a specified end date (usually 6 - 12 months), after which
it automatically terminates.
● Mutual Agreement: Both parties may agree to terminate the contract before its expiration
date.
○ Better Offer or Terms Elsewhere
○ Relocation or Change in Needs
○ Changes in Financial Situation
○ Change in Market Conditions
● Breach: If one party fails to fulfill their obligations under the contract, the other party may
have the right to terminate the contract.
○ Dissatisfaction with Service
 ○ Finding a Property on Their Own (Clause 8 of EBBA Florida)
● Cancellation Clause: Some contracts may include provisions for early termination under
certain conditions, such as a cancellation fee or notice period. (Clause 9 of EBBA Florida)

Effects of Breaking Contracts

● Financial penalties or damages for breach of contract.
● Loss of services or representation from the broker/agent.
● Legal action taken by the aggrieved party to enforce the terms of the contract or seek
compensation for losses incurred.

Case 1: If your client with whom you have an enforceable Exclusive Right to Represent Buyer
Agreement closes a transaction with another agent, what happens?

Firstly, if that other agent was the one who directly led to the sale, they're usually the one who gets
the commission from that sale. But there's a rule for agents that says they need to check if a client
is already working with someone else before they sign them up. If the other agent didn't do their
homework to see if the client had an agreement with you and the client didn't tell them about it,
the other agent might have broken the rules.

Secondly, since you had a valid agreement with the client that they would work exclusively with
you, you have the right to insist that the client pays you the commission that the other agent got.
Even though many agents might be reluctant to go after their client for this money, it's still a choice
you have.

Explanation with Legal Jargon: Buyer-Brokerage Agreements: Dispelling Misconceptions

(Reference)

Case 2: Am I Owed A Commission if a Buyer Unilaterally Terminates and Purchases Within the
Term of the Agreement and Protected Period?

Suppose the buyer visits an open house on their own and tells the agent hosting the open house
that they aren't working with any broker. The buyer then decides to buy the house directly
through this agent at the open house, bypassing their own broker.

Even though the buyer didn't use their broker to find or buy this house, the agreement they signed
still requires them to pay their broker a commission. This is because the contract says that any
property the buyer purchases while the agreement is active must involve paying a commission to
their broker, no matter how the buyer found the property.

Furthermore, the agreement specifically mentions that the buyer shouldn't work with other
brokers or hide the fact they have a broker from sellers or their agents. If the buyer goes against
this and the seller’s agent doesn't pay a commission to the buyer’s broker, the buyer themselves
will have to pay this commission. This ensures the broker is compensated for their services during
the agreement term, following the contract's terms that both parties agreed to initially.

Explanation with Legal Jargon: Termination Of A Buyer Brokerage Agreement By The Client
(Reference)

Case 3: I am executing an Exclusive Buyer Residential Brokerage Agreement with my buyers,

and I generally put zero percent (0%) at paragraph 7(a) under “Broker Compensation.” What
happens if the buyers breach the Buyer Brokerage Agreement?

By choosing to write "zero percent (0%)" in your contract under the section for broker
compensation, you're basically saying that you don't expect the buyer to pay you a commission,
then legally, the buyers aren't required to pay you anything if they end up breaching the
agreement. Even if they go buy a house through another broker, they won't owe you money
according to the terms you set in your contract. This makes it hard for you to demand or enforce
any payment from the buyers for your services if things don't go as planned.

Explanation with Legal Jargon: Breach of Buyer Broker Agreement, Now What? (Reference)

NON-EXCLUSIVE AGREEMENT

1. Non Exclusive not-for-compensation contracts

This type of buyer-broker agreement describes the broker’s duties and obligations to the home
buyer, generally to be performed by the broker’s agent. It also outlines the relationship between
the agent and the broker and the buyer’s responsibilities.

This contract specifies there is no compensation to be paid to the broker. Other common
components include that the buyer can retain more than one brokerage and either party can
revoke the contract at any time.

2. Non Exclusive right-to-represent contracts

This buyer-broker agreement defines the broker’s responsibilities to the buyer, the relationship
between the broker and the agent, and the buyer’s obligations. It provides for compensation to be
paid to the broker if the broker proposes the house the buyer decides to buy or otherwise
represents the buyer.

If another party pays a commission to the broker, this obligation is removed. Additionally, the
buyer is typically able to buy a home through another broker as long as that home was not
proposed by the previous broker. Usually these agreements may not be revoked except for
specified reasons.
Sample: Non-Exclusive-with-Retainer.pdf - Receives non-refundable upfront fee for initial
services and a success fee if the buyer buys a property through the agent.

The Non-Exclusive Buyer Agency Agreement with Retainer and Consent to Designated Agency
and Buyer Found Property Provision is a legally binding contract between the buyer and the
broker. It outlines the terms and conditions of the relationship between the two parties, including
the broker's duties to locate or procure real property acceptable for purchase/lease by the buyer,
the term of the agreement, the broker's services and duties, the buyer's duties to cooperate with
the broker, the broker's compensation, and other provisions such as consent to designated agency,
disclosure of identity/other brokers/other potential buyers, entire agreement/governing law, and
attorney's fees. The buyer and the broker both sign the agreement, indicating their agreement to
the terms and conditions. The agreement is enforceable in a court of law.