What is an Exclusive Brokerage Agreement?

Information in this article is paraphrased from Utah Code -- Title 61 -- Chapter 02 -- Division of Real Estate
[original document source: http://le.utah.gov/~code/TITLE61/htm/61_02_002700.htm]

An "Exclusive Brokerage Agreement" is a written agreement between a client and a principal broker that

• gives the principal broker the sole right to act as the agent or representative of the client for the purpose of purchase, sale, lease, or exchange of real estate, an option on real estate, or an improvement on real estate.
• gives the principal broker the sole right to to list that real estate, option on real estate, or improvement on real estate for sale, lease, or exchange
• gives the principal broker the expectation of receiving valuable consideration in exchange for the principal broker's services

A Principal Broker subject to an Exclusive Brokerage Agreement shall:

• accept delivery of and present to the client offers and counteroffers to buy, lease, or exchange the client's property;
• assist the client in developing, communicating, and presenting offers, counteroffers, and notices; and
• answer any question the client has concerning:

  (A) an offer;
  (B) a counteroffer;
  (C) a notice; and
  (D) a contingency

The Principal Broker's services to the Client cease, and the Exclusive Brokerage Agreement is terminated at such time as:

• after an agreement for the sale, lease, or exchange of the real estate, option on real estate, or improvement on real estate is signed; AND all contingencies related to the sale, lease, or exchange are satisfied or waived; AND the sale, lease, or exchange is closed (see definition on right); OR
• the term defined in the Exclusive Brokerage Agreement expires or terminates.

But I thought I was hiring the Agent I interviewed?!

Technically your Exclusive Brokerage Agreement is with a Principal Broker. But the Agreement gives you the option to designate a sales agent or associate broker to represent you on behalf of the Principal Broker. Your selected designee (Agent) must be affiliated with the Principal Broker with whom you have the Agreement.

Definitions

"Principal Broker" is

"Client" is any person or entity who makes an exclusive brokerage agreement with a principal broker.

"Closed" means that ALL of the following has occured:

(i) all documents required to be executed under the contract are executed;
(ii) all monies required to be paid by either party under the contract are paid in the form of collected or cleared funds;
(iii) the proceeds of any new loan are delivered by the lender to the seller; and
(iv) all applicable documents are recorded in the office of the county recorder for the county in which the property is located.

[original document source: http://le.utah.gov/~code/TITLE61/htm/61_02_001000.htm]