As a property owner and someone who may know a thing or two about property law, there is a high chance that you may have heard about a conjunction agreement. Although many may argue that they are not as popular as they once were (which is true), nonetheless, consent agreements are still a thing, and they are still very much legal.
Let’s assume you are a realtor and a client approaches you to help them sell their property. Ideally, you will want to advertise to everyone that you have a property for sale, and if you are lucky, you will find a buyer for the property. But what if, after all the advertising, you still can’t find a buyer for the property? Then this is where a conjunction agreement comes into play.
What Exactly Is a Conjunction Agreement?
If you are familiar with the English part of speech, the term “conjunction” should help you decipher what we are talking about here. For further clarification, we will try to explain the term in a very simple way.
Simply put, a conjunction agreement can be seen as a binding contract between two real estate agents or property vendors. The main purpose of this binding contract is to allow one agent to transfer their obligation to sell a property to another agent (and vice versa) while ensuring that both agents are fully compensated for the property sale.
After the sale has been completed, the commission earned will be divided among the two agents. How this commission will be divided is totally up to the two agents. They do not need to conform to industrial rules before they both determine their share of the earned commission. Usually, the percentage of commission is included in the contract agreement before they both sign it. This will help to prevent any future conflict.
How Does a Conjunction Agreement Work?
Contrary to what most people believe, a conjunction agreement is not complicated. It is simply a written agreement between two real estate agents. The main purpose of this agreement is to ensure that properties sell faster. The joint agreement form typically contains:
- The listing agent’s and co-joined agent’s contact information. This includes their names, agency names, etc.
- Full details about the property that is up for sale: This will typically include the address of the property, the postal code, and the current state of the property.
- Every detail about the property owner (the vendor) will also be included in this agreement. Note that nothing must change in the vendor’s details and demands. As it was on his contract agreement with the listing agent, so should it remain on the conjunctive agreement
- And lastly, the main section of the form will include the vendor’s asking price, the agent’s selling fee, and the commission percentages mutually agreed upon by the two parties.
- The conjuncture basis must be carefully stated.
One thing to note is that the agreement will only become legally binding when the two agents sign the contract/documents.
Why Do You Need a Conjunction Agreement?
As a real estate agent, you may ask yourself this same question. Well, we get it. Not many people want to share what they are supposed to earn with another person, especially someone in the same field. But, no matter how you look at it, one thing is certain: a conjunction agreement has its benefits. This section will attempt to show why having a Conjunction Agreement with another agent is not a big deal.
First and foremost, having a Conjunction Agreement with another agent will help you create a better partnership with another agent in the same line of business. Also, if you have a property on your hand that you are obliged to sell, and for whatever reasons you can’t, then you will need a Conjunction Agreement, as not only will that take the burden off your neck, but it will also ensure that you move to other projects.
Where Can You Get A Conjunction Agreement?
As stated earlier, a Conjunction Agreement is not a new thing. This practice was, in fact, a big thing in the late 1990s and early 2000s. But as they often say, nothing is old-fashioned in this business. Therefore, if you are an agent and you need legal help with a conjunction agreement, then our lawyers are readily available to draft a personalised conjunction agreement form for you. Here are some other cool things you will benefit from when you hire us
- A customized Conjunction Agreement that perfectly complements your company’s needs.
- We also offer consultation services before and after the Conjunction Agreement has been drafted. Also, irrespective of the subject matter, as long as it is related to the law, we are always available to answer everyone’s questions.
- Lastly, we ensure that you get a complimentary amendment added to the final draft we will provide you.
Conclusion
As a human being, you must remember that sometimes you can’t do it all. The same idea can be applied to the real estate business. There will come a time when you won’t have any other option but to let another agent handle the sale of a property so that you can move over to another property. And this is where the Conjunction Agreement comes in.
However, to avoid issues with commission payment and other things, you shouldn’t attempt to draft the conjunction agreement yourself. Instead, you should seek the help of experts.
