What Happens When You Have a Contract with a Real Estate Agent?

Understanding an exclusive real estate contract

Understanding a Real Estate ContractAn exclusive real estate contract is an agreement between a house buyer (or seller) and real estate agent in which the real estate agent gains a commission on the agreed-upon property closed/sold within a certain period.

Exclusive contract with buyer or seller

An exclusive contract between a seller and a real estate agent is an agreement where the seller expects the listing agent to sell the house in their place, earning a commission while they do so. The reason for an exclusive contract between a seller and real estate agent is to motivate the real estate agent to sell the property as quickly as possible and at the highest price. The real estate agent is to market the property and perform other various functions involved in the sale of the property which can be putting up an ad for the property.

On the other hand, an exclusive contract between a buyer and a real estate agent has as its motive, the proper representation of the buyer’s interests. Buyers rarely have to pay commission to a real estate agent as it is usually covered by the seller.

Exclusive contracts with real estate agents: What you should know

Signing an exclusive contract with real estate agents stops clients from working with other agents within the stipulated time in the contract or when the contract expires. There are cases where you can work with another real estate agent and that is if the exclusive contract signed by the client and the real estate agent only involves a specific type of property. In this case, you can work with another real estate agent to buy another property.

There are benefits of signing an exclusive contract with a real estate agent and that includes reduced stress/burden, easier sales as a seller, and more.

When should you sign an exclusive contract?

You should sign an exclusive contract with a real estate agent when you are serious about buying or selling, and you want someone to exclusively represent your interest through reading and negotiating your agreement.

Can you terminate the contract between yourself and your real estate agent?

Well yes, you can. It is more favorable if you, at the point of signing the contract, clearly stated the terms by which terminations can be made. Note that some agreements provide for payment of commission to the real estate agent from the client if the agreement is terminated earlier than stipulated.

What is the most ideal length of a contract?

The duration of the contract depends on you and the real estate agent. Mostly contract is between three months, six months, a year, and six months as an average. The duration of the contract must be able to serve the real estate agent that is they are able to market the house and it is within a reasonable time of the buyer wanting to buy the house.

Should I sign an exclusive contract?

Signing an exclusive contract from the beginning helps to state your needs and expectations from the real estate agent. An exclusive contract states the rights and responsibilities of both parties interests. It is also in your best interest to have a representative who understands real estate and can offer the best advice.


An exclusive contract with a real estate agent is a written and signed contract between the buyer (or seller) and a real estate agent where the client pays a commission during the agreed duration of time. Most real estate agents will insist on an exclusive contract as time, the effort will be used on a property that may possibly yield them little to no commission.

All exclusive contracts are negotiable between either a seller or buyer and a real estate agent. The contract must state both parties’ interest, the reward (the buyer gets the property, the seller gets to sell the property and collect their money, the real estate agent gets their commission) from the sale. Discussion with the agent, drafting, and reading of the proposed agreement, and discussion with a lawyer are advised.

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