The Cooperating Broker Compensation Agreement serves as a crucial document in the U.S. real estate industry, establishing clear guidelines for commission sharing and professional cooperation between brokers. This agreement becomes necessary when brokers from different firms collaborate on real estate transactions, requiring a formal structure for splitting commissions and defining responsibilities. It ensures compliance with federal regulations such as RESPA and state-specific real estate laws while protecting all parties' interests. The document typically includes detailed commission structures, payment terms, territorial considerations, and dispute resolution procedures.
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1. Parties: Identification of the cooperating brokers entering into the agreement
2. Background: Context of the cooperation and purpose of the agreement
3. Definitions: Key terms used throughout the agreement including terminology from RESPA and state regulations
4. Scope of Cooperation: Details of how the brokers will work together and compliance with antitrust laws
5. Compensation Structure: Commission splits, payment terms, and RESPA compliance provisions
6. Term and Termination: Duration of agreement and termination conditions
7. Confidentiality: Protection of shared information and data privacy requirements
1. Territory Definition: Geographic boundaries of cooperation, used when territory restrictions apply
2. Marketing Arrangements: Specific marketing responsibilities and compliance with fair housing laws, used when joint marketing is planned
3. Dispute Resolution: Mediation/arbitration procedures, recommended for longer-term agreements
4. Insurance Requirements: Specific insurance obligations and liability coverage requirements
1. Commission Schedule: Detailed breakdown of commission splits for different transaction types
2. Territory Map: Visual representation of geographic territory if applicable
3. Service Level Agreement: Detailed performance expectations and standards
4. Required State Disclosures: State-specific forms and disclosures as required by law
Relevant legal definitions
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