Mortgage Broker Representation Agreement

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This form is used by a seller’s agent when employed by a property owner as their sole agent for a fixed period of time, to list the property for sale, locate a buyer and sell the property.

Your use of RPI Form 104

A mortgage broker representation agreement is an employment contract a broker and an owner or buyer of real estate, whether an individual or entity, enter into.

The broker’s client may be:

an owner or buyer of real estate who seeks mortgage funding;
a holder of a trust deed note who seeks a loan secured collaterally by the trust deed note; or
a noteholder who seeks to sell a note which is directly or collaterally secured by a trust deed.

In the practice of mortgage loan brokerage, the broker and the client enter into a representation agreement when the client wants the broker to:

obtain a mortgage secured by their real estate;
arrange a loan collaterally secured by an existing trust deed note they hold [See RPI Form 104]; or
sell an existing note directly or collaterally secured by a trust deed. [See RPI Form 112]

The representation agreement obligates the client to pay the broker a stated fee when the broker has fully performed or is otherwise entitled to a fee under the terms of the representation.

Written fee agreement

A broker and their agents prepare a mortgage broker representation agreement form when they come to an agreement with a client to provide services, for a fee, to:

arrange mortgage financing to fund the purchase of real estate;
refinance an existing mortgage; or
further encumber a property to obtain cash. [See RPI Form 104]

On entering into a mortgage broker representation agreement with exclusive right-to-borrow, the client employs the broker to act on their behalf to locate a lender and arrange funding secured by:

a property to be purchased; or
a property or trust deed note the client owns or holds. [See RPI Form 104]

The exclusive right-to-borrow agreement grants the broker sole authority to act as the client’s representative to solicit lenders and locate one who will originate a mortgage (or collateralized loan) on terms and conditions the client seeks.

It also specifies the fee amount the client agrees the broker will receive and the conditions to be met for the broker to earn and be entitled to collect the fee.

Formal documentation of an obligation to pay a fee — a written employment agreement the client signed — is the legislatively enacted and judicially mandated requisite to the right to enforce collection of an earned brokerage fee from the client.

Analyzing the mortgage broker representation agreement

A broker and their agent use the Mortgage Broker Representation Agreement — Exclusive Right to Borrow published by Realty Publications, Inc. (RPI) when entering into an employment with a buyer, an owner of real estate or a holder of a trust deed note, to act as their sole agent for a fixed period of time. The form authorizes the agent to diligently arrange a mortgage secured by the real estate or trust deed note. [See RPI Form 104]

The Mortgage Broker Representation Agreement — Exclusive Right to Borrow contains:

Representation commitments: the representation period, broker objectives and the amount of any buyer’s or owner’s trust fund deposit are listed [See RPI Form 104 §1];
Addenda: a credit application, loan purpose statement, acknowledgement of changing conditions, and space for other addenda are included in a checklist [See RPI Form 104 §2];
Brokerage fee: the amount of the broker fee the client agrees the broker is to receive for their services is entered [See RPI Form 104 §3];
Mortgage terms: repayment terms for the funds the buyer or owner seeks to borrow [See RPI Form 104 §4];
Real estate securing the mortgage: the type, address, recorded encumbrances, improvements, fair market value (FMV), property taxes and rental information are disclosed [See RPI Form 104 §5];
Personal property included as collateral: a description, monetary value, interest and lender are given [See RPI Form 104 §6];
General provisions: Broker and owner authorizations and a mediation provision are boilerplate [See RPI Form 104 §7]; and
Signatures of the broker and buyer or owner. [See RPI Form 104]