CONCEPT OF REAL ESTATE BROKERAGE
developer for the broker to negotiate a joint venture agreement for
REAL ESTATE BROKERAGE
-a natural or judicial person
-a contract agency.
Scope of Real Estate Brokerage
SALES AGENCY- Engagement to look for a buyer
PURCHASE AGENCY- Authority to find and buy a specified property
LEASE AGENCY-Procurement of tenants for rental properties
EXCHANGE AGENCY- Find a property in exchange for the principal’s.
LOAN AGENCY- Find a lender and secure a loan for the principal
JOINT VENTURE AGENCY-Negotiation between landowner and developer.
General Steps of brokerage
 Securing Listing-contract between seller & broker/Authority to Sell.
Kind of Listing:
 As to form: oral/ written
 As to exclusiveness
Open, Non-exclusive, “First Come, First Serve”- Authority given to 2
or more brokers
Exclusive Agency Contract- broker is NOT entitled to a commission.
Exclusive Right to Sell- broker is entitled to a commission
 As to function of broker
Sales Agency – authority given by the seller for the broker to look for a
buyer
PURCHASE AGENCY – authority given by the buyer for the broker to
look for a property and negotiate the purchase
LEASE AGENCY - authority given by the owner of a rental property for
the broker to secure tenants, or authority given by a prospective
tenant for a broker to look for a space to be rented
EXCHANGE AGENCY – authority given by an owner for the broker to
negotiate the exchange of his property
LOAN AGENCY – authority given by a borrower for the broker to
secure a loan to be collaterized by real estate, or authority given by a
financial institution for the broker to procure borrowers
JOINT VENTURE DEVELOPMENT – authority given by a landowner or
development
 As to basis of compensation
PERCENTAGE LISTING- The compensation of the broker is pre-
stipulated % of the consideration or loan obtained
NET LISTING- The compensation of the broker is the amount obtained
over and above the price quoted by the seller
 Procuring Prospect
PROSPECT- A person who has the need and can afford to buy
SUSPECT- Willingness but without capacity. Capacity but without willingness
FUTURE PROSPECT- Willingness but without capacity for the time being
Willingness to have the capacity
 Presentation- Orderly written / oral explanation of facts /make a given
property attractive
 Demonstration-Process of showing the property and pointing out its physical
qualities and other advantages and benefits to arouse the desire to possess or
own it
 Negotiation-Process of reconciling the opposing views of the parties of a
transaction as to price and terms
 Closing-Process when, through the mediation of the broker, the minds of the
parties meet where the buyer’s offer of prices, terms and other conditions
become acceptable to the seller, or vice versa
EARNEST MONEY- Amount accompanying an offer to purchase to manifest good
faith or genuine desire of the buyer to purchase the property
ESCROW- An AGREEMENT wherein the consideration of a contract or a portion
thereof is deposited with a third party known as ESCROW AGENT who is
authorized to release payment upon fulfillment or performance of some act or
condition
OPTION-A CONTRACT between the seller and buyer where the former, for a
consideration known as option money
COMMISSON IS DUE- Entitlement accrues upon consummation, not perfection, of
the contract