Which statement best describes a fee agreement in real estate?

• A. It binds the buyer to pay through the seller.
• B. It obligates fiduciary duties to the seller.
• C. It allows payment of commission from the seller without creating an agency relationship.
• D. It guarantees a higher commission rate.

Answer: (C)

A fee agreement is about how the broker gets paid for specific services, not about forming an ongoing representation. It can specify that the seller will pay a fee or commission for certain tasks without creating a formal agency relationship. In other words, you can have a seller pay for defined services while the broker is not acting as the seller’s agent, so the payment isn’t tied to fiduciary duties that come with agency. This is why the statement describing the arrangement as allowing payment of a commission from the seller without creating an agency relationship best fits a fee agreement.

Other ideas would imply that a fee agreement somehow binds the buyer, imposes fiduciary duties on someone not in an agency role, or guarantees a higher rate of pay. Those points don’t reflect how a fee-for-service or similar fee arrangement operates—separate from any agency relationship.