Texas Real Estate Sales Agent ExamContractsMedium
A buyer's agent is representing a client interested in purchasing a historic home. The client signs a Buyer Representation Agreement (BRA) with the agent. The BRA specifies that the agent will be compensated by a percentage of the sales price, and if the seller's commission offer is less than that percentage, the buyer will make up the difference. This clause is an example of what?
- AA retainer fee clause
- BA protection period clause
- CA commission differential clause
- DAn indemnification clause
Show answer & explanationAnswer & explanation
Correct answer: C. A commission differential clause
A commission differential clause in a Buyer Representation Agreement specifies that if the commission offered by the seller or listing broker is less than the agreed-upon amount in the BRA, the buyer will pay the difference to their agent.
Why the other options are wrong
- A. A retainer fee is an upfront payment for services, often credited against the final commission, but doesn't address commission shortfalls.
- B. A protection period clause ensures the agent gets paid if the buyer purchases a property shown during the agreement term, even after the agreement expires.
- D. An indemnification clause protects one party from liability for losses caused by the other party.
Commission Differential Clause (BRA)
A provision in a Buyer Representation Agreement stating that if the commission offered by the seller or listing agent is less than the agreed-upon amount with the buyer's agent, the buyer is responsible for paying the difference.
- Part of a Buyer Representation Agreement
- Buyer pays if seller's commission offer is too low
- Ensures buyer's agent receives agreed compensation
Memory trick: Difference in pay, buyer must make up the way.