What type of agreement protects a licensee's compensation when working with a For Sale by Owner?

A fee agreement is designed to specifically outline and protect the compensation that a licensee is entitled to receive, even when working with a For Sale by Owner (FSBO) property. In situations where the owner is selling their property without a real estate agent, a fee agreement can establish clear terms regarding the commission or fee owed to the licensee for their services, such as marketing assistance, negotiations, or facilitating the transaction. This ensures that the licensee's work in bringing potential buyers to an FSBO is recognized and compensated accordingly.

Other types of agreements, such as listing agreements, typically involve the seller hiring the licensee to sell the property and include provisions for compensation, but in the case of FSBOs, a fee agreement is more relevant since the owner is not formally listing the property with an agent. Exclusive agency agreements involve commitments from the seller to compensate the agent unless they sell the property on their own, which might not apply in a FSBO scenario. A sales contract, on the other hand, is a legal agreement between the buyer and seller regarding the sale and doesn't address the licensee's commission directly.