For a buyer’s broker to have the ability to negotiate their fee, the buyer’s broker needs to enter into an employment agreement with their buyer, called a(n):
Question & Answer
Review the question and all answer choices
buyer’s listing.
A buyer's listing is incorrect because this term typically refers to an agreement where a seller employs a broker to market their property, not a buyer's broker agreement. It's the opposite side of the transaction.
affiliated business arrangement.
An affiliated business arrangement is incorrect because this refers to a business relationship between brokers or brokerages, not the direct agreement between a buyer and their broker to negotiate compensation.
cooperating broker arrangement.
controlled business arrangement.
A controlled business arrangement is incorrect because this refers to a business arrangement where a broker refers clients to a affiliated business in which they have a financial interest, not the buyer-broker compensation agreement.
Why is this correct?
A cooperating broker arrangement is the correct answer because it specifically refers to the agreement between the buyer's broker and the buyer that allows the broker to negotiate their commission. This formalizes the agency relationship and establishes compensation terms.
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