Commission Agreement
An agreement documenting the commission structure between brokerages, including any commission offered by the seller or negotiated by the buyer.
When Its Used
Executed when there is a commission arrangement between cooperating brokers or when a buyer's commission is being negotiated as part of the offer.
Key Sections
Commission amount or percentage; Source of payment (seller, buyer, or split); Timing of payment; Conditions for earning commission
Common Mistakes
Not documenting commission in writing; Unclear about who is paying; Inconsistency with listing agreement or buyer representation agreement; Not addressing if sale falls through
Pro Tip
Always get commission agreements in writing. Ensure consistency with all other agreements. Address what happens if the transaction doesn't close.
