Agreement Between Broker and Prospective Purchaser

12.7.
BROKER AGREEMENT
Real estate brokers and sales agents have a thorough knowledge of the real estate market in their
communities. They know which neighbourhoods will best fit clients’ needs and budgets. They
are familiar with local zoning and tax laws and know where to obtain financing. Agents and
brokers also act as intermediaries in price negotiations between buyers and sellers. When selling
real estate, brokers arrange for title searches and for meetings between buyers and sellers during
which the details of the transactions are agreed upon and the new owners take possession of the
property.
Most real estate brokers and sales agents sell residential property. A small number—usually
employed in large or specialized firms—sell commercial, industrial, agricultural, or other types
of real estate.
Real estate brokers are becoming increasingly important in real estate residential property
transactions. In the inner-city context, where individuals could not access to real estate
information, brokers play an important role with their expertise, simplifying and smoothening
residential property transactions and commercial property transactions. Some times without real
estate brokers support, it is difficult for buyers and sellers to meet each other, negotiate deals, do
the official paper work and close the deal.
Contract between a broker and a client
Client should be asked to discuss and sign a “contract" with the broker. This contract includes
the terms of sale for the property, (such as the asking price), brokerage arrangements (such as
what the broker will do for the client and how much will be paid to the broker), and the
expiration date of the contract. It should be made sure that the services and terms that are
important are written into the contract. It should necessarily contain a clause that if a property is
introduced by a broker to the client, even if the buyer and seller get in a direct deal afterwards,
will fetch commission to the broker. This will safeguard the interests of the brokers in case either
of the parties wants to by-pass the broker later on.
12.7.1.
AGREEMENT BETWEEN A BROKER AND A
PROSPECTIVE PURCHASER
This Agreement is made on this the day of 20 at by and between:
Mr. S/o. aged about years, resident of hereinafter

called "the broker" (which expression shall, unless it be repugnant to the context or meaning
thereof, be deemed to mean and include his heirs, legal representatives, executors and
administrators) of the ONE PART
AND
Mr. S/o , aged about years, resident of

hereinafter called "the prospective purchaser" (which expression shall, unless it be repugnant to
the context or meaning thereof, be deemed to mean and include his heirs, legal representatives,
executors and administrators) of the OTHER PART.
Whereas the Broker comes into an understanding with the prospective purchaser hereunder in a
written agreement who wish to purchase a property on his name and for that purpose he requires
his services.
And whereas the broker, who is a reputed broker dealing in real estate in the area has shown his
willingness to show him and take reasonable care and caution in finding a house for the
prospective purchaser.
And whereas the prospective purchaser has agreed to appoint the broker on payment, for the
purchase of property on the terms and conditions as hereinafter appearing.
NOW THIS AGREEMENT WITNESSETH AS UNDER:
1. The broker hereby gives his assent to the prospective purchaser that he shall show him
properties of which he can purchase, if the same is as per his requirements, for a consideration.
2. The prospective purchaser hereby asserts the broker that if the property shown to him is clear,
marketable and free from encumbrances and to his requirements he will purchase the same only
through him after paying all the necessary expenditure and brokerage costs before entering into
any kind of agreement with the respective owner of the property/ the seller.
3. The broker hereby undertakes that after the receipt of brokerage commission/ costs from the
purchaser, he shall take steps for the delivery of the abstract of title showing that the seller is real
owner of the property and the property is free from mortgage, lien, charge or any
such encumbrance.
4. The broker hereby undertakes that on receipt of his entire commission in respect of the
property; make the seller execute the agreement between the purchaser and the seller.
5. The broker hereby agrees that he shall be able to find the property for the prospective
purchaser within a period of ------ months from the date of these presents.
6. The broker hereby asserts that he will exercise reasonable care and diligence in the property
and deal with the transaction in good faith.
7. The broker hereby agrees to present all written offers, notices and other communications in a
timely manner with regard to the property whichever the prospective purchaser agrees to
purchase.
8. The broker hereby agrees to disclose the material facts known to him about the seller which
are not apparent or readily ascertainable to the prospective purchaser.
9. The prospective purchaser shall not make any additional offers to purchase the property
directly with the seller without the interference or the knowledge of the broker.
10. The above agreement for brokerage will last for a period of -------- months, the period within
which the broker affirms to find a house for the prospective purchaser.
The following list shall be maintained by the broker along with the prospective purchaser (with
their attestation).
(a) The period of stay at the site and the day / time at which the property was shown.
(b) The description of the property [copy of plan].

(c) The price quoted by the mutual parties and related terms.
(d) Names of the persons accompanied the prospective purchaser.
11. The broker hereby asserts that he shall also provide an Advocate to seek expert opinion on
the title of the property and shall provide the services for the execution of Agreement /
Registration as desired by the prospective purchaser.
12. The brokerage cost is hereby fixed at [Rs ] [or] % of the

purchase price which shall be paid by the prospective purchaser to the broker before entering into
any agreement with the seller, however, subject to a fixed sum of Rs. towards minimal
costs of the agreed services. These minimal costs are not applicable if any transaction
materializes out of these services.
13. This agreement constitutes the entire agreement between the parties and supersedes any oral
or written agreement made earlier to the date of this agreement. Any variations/ modifications to
this agreement shall not have any effect unless the same is in writing and executed by both the
parties.
14. If any dispute or differences arise between the parties hereto regarding the claim by one party
against the other or regarding the implementation of this agreement or interpretation or meaning
of any of the clauses herein, the dispute shall be referred to the arbitral tribunal as per the
following terms and condition:
a) Each party shall appoint one arbitrator.

b) The arbitrator appointed by each party shall be a practicing Chartered Accountant or
lawyer.
c) English shall be used as the language for all the arbitration proceedings and the award of
Arbitration.
d) The Arbitration proceedings shall take place at .
e) The Arbitral Tribunal shall enter upon the reference and decide the aforesaid matters. The
Arbitral Tribunal shall make their award within three months after entering upon the
reference or after having been called on to act by notice in writing from any party to the
submission, or on or before any later day to which the Arbitral Tribunal by any writing
signed by them may from time to time enlarge the time in making the award.
f) The Arbitral Tribunal shall record the proceedings of the hearing by way of minutes and
get it signed by both the parties.
g) The Arbitral Tribunal may proceed ex parte in case either party fails to appear after
reasonable notice.
h) This agreement shall remain effective and enforceable against the legal representatives of
either party in case of death.
i) The Arbitral Tribunal may appoint an accountant for examining the account of the party if
they think necessary and the remuneration of the accountant as determined by the
arbitrators shall be the costs in the reference to be paid by the parties as the arbitrators may
direct in their award.
j) In case the Arbitral Tribunal awards that any sum is due from one party to the other, then
the party to whom the said sum is awarded may apply to the court for having a decree
passed in terms of the award and may realize the amount in execution of the decree from
the other party.
k) The provisions of the Indian Arbitration & Conciliation Act, 1996, shall apply to this
reference.
l) The parties would cooperate and lead evidence, etc. with the arbitral tribunal and if one of
the parties does not cooperate or remains absent at the reference, the tribunal would be at
liberty to proceed with the reference ex-parte.
m) The fees of the reference to Arbitral Tribunal shall be Rs. which shall be
inclusive of costs of all the proceedings before the tribunal and shall be borne by both the
parties equally.
n) The Arbitral Tribunal shall make their award, with reasons for the decision, within three
months from the date of entering upon the reference.
o) The award of the Arbitral Tribunal shall be final, conclusive and binding on the parties and
shall not be challenged on any ground except collusion, fraud or an error apparent on the
face of the award.
p) This reference to arbitration shall be deemed to be a reference within the meaning of the
Arbitration and Conciliation Act, 1996 or any statutory modification thereof.
q) No action can be taken under this agreement for the enforcement of any right
without resorting to arbitration under this clause.
IN WITNESS WHEREOF the parties have set their hands on this day of 20--.
Signed and delivered by ............. S/o
Signed and delivered by ................... S/o
WITNESSES:
1.
2.

Agreement Between Broker and Prospective Purchaser

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12.7.

Contract between a broker and a client

This Agreement is made on this the day of 20 at by and between:

Mr. S/o. aged about years, resident of hereinafter

Mr. S/o , aged about years, resident of

NOW THIS AGREEMENT WITNESSETH AS UNDER:

(b) The description of the property [copy of plan].

(d) Names of the persons accompanied the prospective purchaser.

12. The brokerage cost is hereby fixed at [Rs ] [or] % of the

a) Each party shall appoint one arbitrator.

Signed and delivered by ............. S/o

Signed and delivered by ................... S/o

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