What is an exclusive agency agreement?

18.09.2011 00:30
Many of us in a certain period of my life wondering, buy or sell an apartment or other real estate: Is it worth it to place an ad in the newspaper or use other media / advertising?

Some of us doubt whether they should use the services of brokers to facilitate their task in buying or selling an apartment.

Related article: At what time of year is best to buy and sell property?

In this article I will try to answer the above questions, as well as try to explain in more detail the value of an exclusive distribution agreement for real estate broker in the sale of apartments.

The exclusive agreement means the signing of the contract between the seller or buyer of an apartment or any other real estate. Contracts of this kind (agreements) party, namely, the seller and the broker sign an agreement that the broker undertakes to find a potential buyer and as soon as the transaction will be issued, the broker will be rewarded by the amount specified in the contract.

The seller, who concluded the above agreement, and shall not be entitled to bargain on the property with another broker.

The seller pays the broker a fixed percentage, despite the fact that the buyer has addressed himself to the seller or the broker was given.

In order to streamline and give legitimacy to an agreement of this kind, was held "the law of real estate brokers" in 1996, states that a real estate broker has the right to enter into an agreement regarding certain transactions and to obtain an exclusive agreement under the conditions that the exclusivity deal and its period will be confirmed by the signature of the client on a separate document. During this period, the broker will be obliged to hold a number of different promotions.

Law on Brokerage Services provides: a period of exclusivity will not exceed one year from the date of signing the contract, excluding the sale of apartments. If not specified in the contract period of exclusivity, then the term of the contract will not exceed 9 months.

When placing the apartment of the transaction, the situation is quite different. The law states that the exclusivity period should not exceed 6 months. If the period is equal to 6 months has been exceeded, this period will expire at the end of 30 days from the date of signing the contract.

Law on Brokerage Services is this: if the broker is not held promotional activities during the third period of exclusivity, the term period is over.

The broker, which has concluded an exclusive deal, must take at least some advertising activities, such as: advertising through ads, to invite potential customers to see a particular property, etc., etc.

If the contract it was stated that there will be one specific action of the above, as well as an additional step, which was agreed between the parties, for example:

If you own a condo or other property, and you plan to sell it, you should make sure and make sure that the broker advertise your property. Without signing such a document exclusive agreement will be null and forms.

Follows from the above question, how can the seller be sure that all promotional activities will be carried out. The answer to this question is obvious: as soon as the broker enters into an exclusive deal with you, he should try to make every effort to sell your apartment and protect you from unnecessary "headache".

In spite of this, at the conclusion of an exclusive contract with the broker with whom you are going to sign a contract, is necessary to specify an item that would read that the broker agrees to inform you, at least once a week on all activities undertaken.

The broker has not received an exclusive agreement from the customer, will be awarded fees only on condition that he found a buyer.

In a civil case No. 2012/04 in the District Court of Tel Aviv to hear the case against Gopher Kaufman. Prior to the amendment of the law on brokerage services, the court ruled that the transactions have been concluded and signed after 12.09.2004). The court asked the question: Are the brokerage services are effective in making a deal and if he relies fee. Opinions were divided between those who believed that the fee is believed, because they believed that the deal was concluded during the period of exclusivity, and those who believed the opposite.

The court ruled that the deal, which was concluded before the amendment was set for the law and the contract for an exclusive period is legitimate, even if the broker is not a deal at this time.

The court also ruled, after an amendment to the law that a contract of exclusivity does not entail the right to receive royalties if the broker is not a deal. Law stated: if the broker has carried out promotional activities, it is effective.

This provision can be challenged. If a buyer has proved that despite the advertising of a broker, he is not an effective factor for the transaction, the broker will not be awarded its fees.

Dear sellers! It is very important not to sign an exclusive agreement with several brokers simultaneously, because once signed the contract for the sale, you will be required to pay a fee to each broker with whom you signed the contract. If you refuse to pay one of the brokers with whom you signed a contract you will be exposed to lawsuits.

It must be remembered that in the case in which there is an attempt to bypass a broker with reference to other brokers - in this case, the broker may win compensation, even if it was not those in the escalation deal. Therefore it is always worth thinking twice before attempting to bypass a broker in connection with the possible consequences.

The opinions of lawyers on the topic of exclusivity are divided: there are those who believe that the issue of exclusivity is designed for real estate, which is difficult to sell. Therefore, the exclusive approach to real estate, which has the potential buyers features such as: holiday apartments or flats that are bought by foreigners, or when it comes to property, the sale is complicated. But there are those who believe that the issue of exclusivity is created just for a good and expensive property as any property necessary to be able to sell.

This article is not a recommendation, legal advice or legal opinion. And those who rely on this information, does it at their own risk.
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