Brokerage Contract
This is a must! You will have to sign a brokerage contract in order to engage an agent or broker to sell your house. The purpose of the contract is to establish a professional agreement between you and your broker. There are two types of brokerage contract: the exclusive and non-exclusive brokerage contracts.
The exclusive brokerage contract prohibits the seller from hiring another intermediary to sell his or her property. The benefit of this type of contract is that it allows your property to be listed on MLS®, which increases your chance of an advantageous sale.
The non-exclusive brokerage contract allows sellers to sell their property on their own or through the services of any intermediary. This type of contract does not allow for listing on MLS®.
A brokerage contract describes the obligations of both the broker and his or her client, but what are the specifics?
1. Identification of the parties
- Name and address of the broker
- Name and certificate number of the agent
- Name(s) and contact information of the owner(s)
2. Object (sale of the property) and term of contract
The duration of the contract may vary. You will establish it with your agent or broker.
3. Description of the property
- Size of the lot
- General state of the property and its elements
- Cadastral designation
- Amount of taxes
- Etc.
4. Price
The price you ask for the property appears on the brokerage contract. It should take into account market prices. Over-pricing will delay your sale. Listen to the advice of your broker. He or she knows the market, its fluctuations and trends. Your broker or agent will suggest a fair and competitive price. But you must provide all significant information which could influence the sale price.
5. Inclusions and exclusions
It’s best to specify in the brokerage contract which goods are included in the sale and which are excluded: air conditioner, appliances, curtains and blinds, shed, etc.
6. Taking possession and signing of the act of sale
The brokerage contract also specifies the date you wish to close the sale and turn over your property to the buyer.
7. Services and compensation
The contract will express your wish or refusal to use MLS® via your agent or broker. The contract will also describe your broker’s compensation, normally based on a percentage of the sale price.
The obligations of the seller describe, among other aspects, the contract’s exclusivity and the documents required by the broker, which become part of the contract. The obligations of the broker, in turn, describe your agent or broker’s commitments, which include the notions of competence, loyalty and honesty.
It’s important to read your contract carefully before signing it. It takes effect from the moment you are given your copy. As a client, you’re allowed three days from the time you receive your copy to change your mind.