Final answer:
A written brokerage agreement must include identification of the parties, scope of services, compensation details, duration of the agreement, and the duties and obligations of each party involved.
Step-by-step explanation:
Essential Elements of a Brokerage Agreement
A written brokerage agreement is a contract between a broker and their client, detailing the terms under which the broker will provide services to the client. The following five items must be included in a written brokerage agreement:
- Identification of the Parties: Full legal names and contact information of the client and the broker or brokerage firm.
- Scope of Services: A detailed description of the services the broker will provide, including any limitations or exclusions.
- Compensation: The fee structure, including commissions, flat fees, and any other costs associated with the broker's services.
- Duration of the Agreement: Start and end dates or circumstances under which the agreement will terminate.
- Duties and Obligations: Each party's responsibilities under the agreement, including any legal or regulatory obligations.
It's essential to ensure these elements are clearly defined to avoid disputes and misunderstandings during the brokerage relationship.