What Does Broker Protected Mean?

The commission arrangement between the real estate broker and the seller should be clearly agreed upon.

The term "broker protected" is a real estate term that means the seller of the property is willing to work with a broker representing an interested buyer. It indicates that they will pay a commission when the sale is made.

Significance

The word "protected" is used to assure brokers with interested buyers that they will get cut into the deal if they approach the seller with information about the buyer. It is not uncommon for such brokers to get cut out of the deal if the seller has not agreed to protect the broker's interests.

History

Homes are listed as "broker protected" more often when housing sales are slumping. When times are hard, sellers need all the help they can get.

Considerations

If you are buying a house without a broker, and the property is listed as "broker protected," it may give you negotiation leverage. You can use it to remind the seller that he has already indicated his willingness to take a cut on his profit in order to make a sale.

References

• Bankrate.com: Broker's Commission can be Buyer's Discount