Ending brokerage agreements; services, fees, and compensation

Authority and compensation are separate

A brokerage agreement can end through expiration, completion of its purpose, mutual agreement, the principal's revocation, or the agent's renunciation. Death or legal incapacity of an individual principal or broker, destruction of the property, or illegality can also terminate agency. A sales agent's departure does not itself terminate the brokerage's agreement.

The power to end authority is different from the contractual right to end without liability. Early termination can leave damages or an earned fee. Confidentiality generally survives, as does the duty to account for entrusted money and property.

Check surviving obligations

A protection clause can preserve compensation for a specified period after expiration when a buyer introduced during the listing later purchases. Check its notice requirements and any exception for a new exclusive listing. It does not indefinitely extend representation. Contract terms and applicable law control the precise result.

Define services and price

Full service may include pricing assistance, marketing, showings, negotiations, and transaction coordination. Limited service provides an identified subset. A flat fee is a price structure, not necessarily limited service. Percentage, fixed, hourly, and other agreed fees are negotiable. There is no universal commission rate; competing brokers must not agree to fix prices.

Earned, payable, and shared

A fee might be earned by producing a ready, willing, and able buyer on the required terms, or the agreement might condition earning on closing. Identify the actual trigger and payment date. Separate the client's obligation from agreements allocating compensation between brokers or between a broker and a sales agent. Payment alone does not establish representation.

As Texas examples, Tex. Occ. Code § 1101.651(b) channels a sales agent's transaction compensation through the sponsoring broker, including the broker who sponsored the agent when it was earned. Tex. Occ. Code § 1101.806(c) requires a signed written promise, agreement, or memorandum to maintain an action to recover a sale or purchase commission from the obligated party. Neither sets a commission rate.