Real estate brokerage agreements are essential in the real estate industry, especially in the Philippines. It serves as a contract between a brokerage firm and a client who wants to buy or sell a property. In this article, we will discuss the importance of real estate brokerage agreements in the Philippines.
Firstly, a real estate brokerage agreement helps protect the interests of both parties. It lays out the terms of the agreement in black and white, so there are no ambiguities or misunderstandings. The agreement specifies the duration of the brokerage services, the commission fee, and other important details.
In the Philippines, real estate brokerage agreements are governed by the Republic Act No. 9646, also known as the Real Estate Service Act of 2009. This law aims to regulate and professionalize the real estate industry, which includes the practice of real estate brokerage.
Under this law, real estate brokers and salespersons are required to have a valid license issued by the Professional Regulation Commission (PRC). They are also required to abide by the rules and regulations set by the PRC and other government agencies.
Real estate brokerage agreements in the Philippines typically involve a commission fee that ranges from 3% to 5% of the total selling price. This fee is negotiable but should be agreed upon by both parties before signing the agreement.
It’s important to note that real estate brokers in the Philippines are prohibited from charging any other fee aside from the commission fee. This means that any other fees or charges related to the brokerage services should be clearly specified in the agreement.
In addition to protecting the interests of both parties, a real estate brokerage agreement also serves as a legal document that can be used in case of disputes. If either party violates the terms of the agreement, the other party can seek legal action and use the agreement as evidence in court.
To wrap up, real estate brokerage agreements play a crucial role in the Philippine real estate industry. It helps protect the interests of both parties, ensures compliance with government regulations, and serves as a legal document that can be used in case of disputes. If you’re planning to buy or sell a property in the Philippines, it’s important to engage the services of a licensed and reputable real estate broker and sign a brokerage agreement that spells out the terms of the transaction clearly.