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Updated about 4 years ago,
Agreement Between Brokers Question
I am a Realtor and I have a client who I help with on rental properties quite often. He is considering selling a property he owns to the tenant that currently lives there. Since I have a good business relationship with him he told me about the deal, but the deal will likely be done directly between my client and the tenant without having any agents involved. I'm fine with this since as I said I help this client out quite often and losing one deal is not a big deal to me in the long run. My question is regarding the agreement between brokers that was signed when this tenant moved in. Assuming the tenant does not bring his Realtor into it either to avoid anyone getting the agent cut is the any recourse for the rental agent to request payment. The agreement between brokers was signed when they moved in and states: "If Landlord agrees to sell the Property to Tenant during the term of the lease, including any renewal or extension, Listing Broker will pay Other Broker an additional fee equal to: 3% of the sales price. The fee under this Paragraph is earned when Landlord agrees to sell the Property to Tenant and is payable when Listing Broker receives Listing Broker's fee for the sale in accordance with a separate agreement between Landlord and Listing Broker. "Sell" means to agree to sell, convey, or transfer a legal or equitable interest by written or oral agreement or option." I want to be sure to advise my client correctly on this as I don't want him to negotiate a sale price based on no agent costs and then have the agent demand their 3%. My client did not sign the agreement between brokers and was only signed by the agents involved.