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Las Vegas Brokerage Agreements – Types of Representation

Updated: Jan 11


When one hires a real estate broker in Las Vegas, they enter into a contract called a Brokerage Agreement.

Nevada Brokerage Types of Representation



This agreement expresses the type of representation the broker will have with the client.


In Las Vegas a client can hire a broker for two types of representation, Open and Exclusive.


In an Open agreement the client may hire additional brokers if they so choose. If a different broker fulfills the transaction for the client, that broker alone receives a commission and all other brokers the client may have hired do not receive any commission.


This is determined by which broker is the “procuring cause” of the transaction, being defined as the broker which finds a buyer who is ready, willing, and able to purchase on the seller’s terms which can be either the price the seller asked or the price the seller agreed to if the seller accepted an offer lower than the asking price.


Once a broker satisfies the procuring cause all other brokerage agreements for the property are automatically terminated. An Open agreement can be oral or written. The default position under Nevada law is all oral brokerage agreements are Open.


A written agreement must contain specific terms or state in the title it is an Exclusive agreement otherwise state law considers it an Open agreement.


In contrast to an Open agreement, is the Exclusive agreement.


Exclusive representation protects the broker from interference by other brokers which a seller may hire.


There are two types of exclusive brokerage agreements, the Exclusive Right to Sell and the Exclusive Agency. An Exclusive Right to Sell gives the broker their commission regardless of who is the procuring cause.


In an Exclusive Agency agreement, the broker will not earn a commission if the seller finds a buyer on their own but is still protected in earning their commission should another broker the seller hired in violation of the exclusive nature of the agreement be the procuring cause.


However, the broker under an Exclusive Agency agreement must still cooperate with other brokers if it is in the best interest of the client.


The role of a Las Vegas Real Estate Attorney guidance in drafting a brokerage agreement


Legal guidance is crucial in drafting a brokerage agreement to ensure that it complies with relevant laws and regulations.


Las Vegas Real Estate lawyers with expertise in this area can help customize the agreement to meet the specific needs and interests of the parties involved.


They can provide valuable insights, suggest appropriate clauses, and ensure that the agreement provides adequate protection and clarity for both the broker and the client.


How a brokerage agreement can prevent disputes


A brokerage agreement can prevent disputes by clearly outlining the terms and conditions of the professional association between the broker and the customer. It leaves no room for misinterpretations or misunderstandings as both parties are aware of their obligations and duties.


By having a written agreement that addresses potential areas of conflict and provides a mechanism for resolution, disputes can be minimized or resolved more easily.


What someone engaging a broker should do to protect their interests


To protect their interests when engaging a broker, it is advisable for individuals to seek legal guidance in drafting a brokerage agreement that is tailored to their specific requirements.


This ensures that the agreement adequately addresses their concerns and safeguards their rights.


Using a platform that offers free pricing proposals from vetted Las Vegas Real Estate Attorneys can provide cost-effective legal solutions, and can be a helpful approach in this process.


The benefits a brokerage agreement can provide


A well-drafted brokerage agreement provides several benefits. Firstly, it offers protection for both the broker and the client by clearly outlining their rights, responsibilities, and liabilities.


Secondly, it brings clarity to the working relationship, ensuring that both parties are on the same page regarding expectations and deliverables.


Additionally, a brokerage agreement ensures compliance with legal and industry regulations. Lastly, it helps establish trust and transparency between the broker and the client.


Why a brokerage agreement is necessary


A brokerage agreement is necessary to ensure that both the broker and the customer understand their obligations and duties, and to prevent misinterpretations or disputes.


A brokerage agreement in Las Vegas serves as a crucial document that summarizes the terms and conditions of the professional association between a broker and a customer.


Common Questions


  1. How is the broker protected against claims, damages, or losses? The broker is protected against claims, damages, or losses resulting from the actions or omissions of the client or third parties through indemnification provisions in the brokerage agreement.

  2. What are the disclosure requirements for the broker? The broker is obligated to provide the client with all relevant information about the services being provided, including any conflicts of interest, fees, and risks.

  3. What is the standard of care expected from the broker?

  4. What is the process for terminating the brokerage agreement?

  5. What are the confidentiality obligations of the broker?

  6. What are the client responsibilities in the brokerage agreement?

  7. What are the specific services that the broker will provide to the client? The specific services that the broker will provide to the client can include finding suitable investment options, handling investment portfolios, or providing financial advice.


Our Las Vegas Real Estate Attorneys have significant experience in resolving a full range of real estate matters on situations involving retail and commercial properties.


To learn more, visit Las Vegas Real Estate Attorneys or call 800-233-8521 for a free phone consultation.


 


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