Question: We recently began sponsoring an agent who advised us that at her old brokerage she was allowed to sign the listing agreements and buyer brokerage agreements on behalf of the brokerage. I thought only the designated managing broker could sign those agreements. Who is right in this case?

Answer: It’s possible that you are both right. It will be an internal policy decision at each brokerage to set forth WHO has the ability to bind the brokerage to buyer or seller brokerage agreements. For example, it could be solely the designated managing broker; it could also be certain licensees within the brokerage; or all licensees. Keep in mind under the Real Estate License Act that signing authority can NOT be delegated to licensees who have yet to complete their post license education:

Sec. 10-55. Designated managing broker responsibility and supervision.

… (b) A designated managing broker’s responsibilities shall further include directly handling all earnest money, escrows, and contract negotiations for all transactions where the designated agent for the transaction has not completed his or her 45 hours of post-license education, as well as the approval of all advertisements involving a licensee who has not completed his or her 45 hours of post-license education. Licensees that have not completed their 45 hours of post-license education shall have no authority to bind the sponsoring broker.

So long as the broker signing the brokerage agreement has successfully completed their post-license education, the broker could legally bind the company to that agreement if permitted to do so under their brokerage policy. The question is whether the company policy delegates binding authority to its qualified brokers, or whether the company policy requires the designated managing broker to execute all brokerage agreements that would bind the company. In other words, whom does the company consider authorized signers with the ability to execute contracts on behalf of the company?