Builder Broker Agreement for the United States

Builder Broker Agreement Template for United States

A Builder Broker Agreement is a legal contract used in the United States that establishes the terms and conditions between a builder/developer and a real estate broker for the marketing and sale of new construction properties. This agreement outlines commission structures, responsibilities, marketing obligations, and performance expectations while ensuring compliance with federal and state real estate laws, including RESPA and state-specific broker regulations.

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What is a Builder Broker Agreement?

The Builder Broker Agreement is a crucial document in new construction real estate transactions within the United States. This agreement is typically used when builders or developers need professional representation to market and sell their newly constructed properties. The contract defines the scope of the broker's services, commission structures, and marketing responsibilities while ensuring compliance with both federal and state regulations. Builder Broker Agreements are particularly important in managing large-scale developments or multiple property listings, providing clear guidelines for both parties and protecting their respective interests throughout the sales process.

What sections should be included in a Builder Broker Agreement?

1. Parties: Identification of the builder and broker, including legal names and addresses

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Scope of Services: Detailed description of broker's responsibilities and services

5. Commission Structure: Payment terms, rates, and conditions for commission

6. Term and Termination: Duration of agreement and termination conditions

7. Representations and Warranties: Legal assurances from both parties

8. Compliance with Laws: Obligations to comply with relevant real estate and construction laws

9. Indemnification: Mutual indemnification provisions and liability allocation

10. Insurance Requirements: Required insurance coverage and minimum limits

11. Confidentiality: Protection of confidential information and trade secrets

12. Dispute Resolution: Process for resolving disputes between parties

13. General Provisions: Standard boilerplate clauses including notices, assignment, and amendments

What sections are optional to include in a Builder Broker Agreement?

1. Marketing Requirements: Specific marketing obligations, standards, and budget allocation

2. Exclusivity Provisions: Terms of exclusive representation and any territorial restrictions

3. Performance Metrics: Specific performance targets, evaluation criteria, and consequences

4. Training Requirements: Specific training obligations for broker's staff on builder's products

5. Model Home Provisions: Terms relating to model home management and showing requirements

What schedules should be included in a Builder Broker Agreement?

1. Schedule A - Property Schedule: List of properties or developments covered under the agreement

2. Schedule B - Commission Schedule: Detailed breakdown of commission structures and calculations

3. Schedule C - Marketing Materials: Approved marketing templates, guidelines, and brand standards

4. Schedule D - Service Level Agreement: Detailed performance standards and metrics

5. Schedule E - Required Insurance: Detailed insurance requirements and minimum coverage limits

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Cost

Free to use

Relevant legal definitions

Clauses

Relevant Industries

Real Estate
Construction
Property Development

Relevant Teams

Real Estate
Legal
Sales
Operations
Business Development

Relevant Roles

Real Estate Broker
Construction Manager
Development Director
Sales Manager
Project Manager

Industries

RESPA: Real Estate Settlement Procedures Act - Federal law governing real estate transactions, including disclosure requirements and prohibition of kickbacks

TILA: Truth in Lending Act - Federal regulation requiring disclosure of credit terms and standardized information about borrowing costs

Fair Housing Act: Federal law prohibiting discrimination in real estate transactions based on race, color, religion, sex, national origin, familial status, or disability

ADA: Americans with Disabilities Act - Federal law requiring accessibility considerations in construction and real estate

Interstate Land Sales Full Disclosure Act: Federal law requiring developers to register subdivisions and provide detailed information to buyers in interstate land sales

State Real Estate Licensing Laws: State-specific requirements for obtaining and maintaining real estate broker licenses and compliance with professional standards

State Construction Laws: State-specific regulations governing construction activities, contractor requirements, and building standards

State Contract Laws: State-specific requirements for contract formation, enforcement, and remedies, including Statute of Frauds provisions

Building Codes: Local and state regulations specifying construction standards, safety requirements, and building specifications

Zoning Regulations: Local laws governing land use, construction types, and development restrictions in specific areas

Environmental Regulations: Federal and state laws governing environmental impact, protection, and compliance in construction projects

Construction Lien Laws: State-specific laws governing mechanics liens and other construction-related security interests

Real Estate Commission Rules: State-specific regulations governing real estate broker conduct, commissions, and professional practices

Professional Liability Requirements: Insurance and liability requirements for brokers and builders, including errors and omissions coverage

Consumer Protection Acts: State and federal laws protecting consumers from unfair practices in real estate and construction transactions

Business Organization Laws: State laws governing business entity formation, licensing, and operation requirements for brokers and builders

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A U.S.-governed contract establishing an exclusive relationship between a property owner and real estate agent, granting sole rights for property marketing and sale/lease.

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What is a Builder Broker Agreement?

What sections should be included in a Builder Broker Agreement?

What sections are optional to include in a Builder Broker Agreement?

What schedules should be included in a Builder Broker Agreement?

Authors

Alex Denne

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