Profit-Sharing Agreement
This document creates an agreement between (1) a
party that owns (or will own) an interest in certain real
estate and (2) a party that will act as a real estate
broker and will act to improve the value of the real
estate.
This document may be modified, to give the broker a
specified percentage of any future profits, and a certain
commission for all broker-related work. It also
anticipates what will be done if the property could be
sold but is not sold in a timely fashion.
ALL INFORMATION AND FORMS ARE PROVIDED “AS IS” WITHOUT ANY
WARRANTY, EXPRESS, IMPLIED, OR OTHERWISE, INCLUDING AS TO THEIR
LEGAL EFFECT AND COMPLETENESS. They are for guidance and should be
modified to meet your needs and the laws of your state. Use at your own risk.
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creating or entering into an Attorney-Client relationship. Docstoc does not provide
legal advice. The information and forms are not a substitute for the advice of your
own attorney.
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PROFIT SHARING AGREEMENT
This Profit Sharing Agreement (“Agreement”) is entered into between __________________
[Provide name of person or business that will be hiring the real estate agent to improve
the property] (“Profit Sharer”) and _____________________ (“Worker”) effective
__________________, 201_____ [Enter effective date of agreement].
Profit Sharer has or will acquire ownership title in its/his/her/their name, without Worker's
name on title, to the property located at ____________________________________ (the
“Property”).
Profit Sharer and Worker will work together to improve the Property (the “Project”) as
follows: Profit Sharer will provide all monies necessary and solely incur all debts necessary
for completion of the Project, and Worker will be responsible for the day-to-day details
necessary to complete the Project. When the Profit Sharer and Worker complete the Project,
the Property will be listed at market price, with intent to sell quickly with any price
reductions agreed to by both. In exchange for Worker providing the day-to-day supervision
of the Project, Profit Sharer agrees that Worker shall be paid fifty percent (50%) of any
positive profit achieved in the sale of the Property. The Profit shall be calculated by adding
all monetary costs necessary to complete the Project to the purchase price and then
subtracting this amount from the final sales price of the Property. Profit Sharer shall give
written instructions to escrow to pay an amount equal to fifty percent (50%) of the Profit to
Worker directly out of the Property sale escrow. [Instruction: Parties may use this 50%
figure, or, may instead increase or decrease this percentage, as mutually agreed-upon.]
Also, Worker will act as the real estate broker of record for all Property and Project related
real estate transactions and receive as compensation all appropriate brokerage commissions.
This includes one half the listing broker’s commission on the Property purchase (typically
3% paid by the seller) and 3% listing commission on the Property sale. [Instruction:
Parties may use this % figure, or, may instead increase or decrease this percentage, as
mutually agreed-upon.]
Should Profit Sharer sell or transfer the Property for any reason prior to the completion of the
Project, Worker shall be entitled to payment for his or her or its services. Such payment shall
be determined based on the number of months of the Project at a rate of five thousand dollars
per month, prorated to the nearest day. In addition if the Property is sold or transferred prior
to completion of the Project for an amount that results in a positive profit, then the profit
shall be divided equally between the parties as set forth above. [Instruction: Parties may
use this $5,000 figure, or, may instead increase or decrease this amount, as mutually
agreed-upon.]
Should Profit Sharer not aggressively try to sell the Property, or for any reason not sell the
Property by ninety days after completion of the Project, Profit Sharer agrees to borrow
against the Property and pay as soon as possible to Worker 50% of the Profit calculated from
as if the Property had been sold for the market value at the time of ninety days after the
Project completion, and also pay Worker five thousand dollars per month starting from
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ninety days after project completion. [Instruction: Parties may use these figures, or, may
instead increase or decrease this percentage and fee, as mutually agreed-upon.]
The rights and obligations of Agreement may not be assigned or delegated by either party
without the prior written consent of the other party, which consent shall not be unreasonably
withheld; provided that the parties shall be allowed to engage subcontractors to perform
services on the Project. No such assignment or delegation will relieve the party of its duties
under this Agreement.
This Agreement will be construed in accordance with the laws of the State of
_______________. The parties submit to the jurisdiction of the appropriate court of
_______________________. [Instruction: Provide the county and town/city where both
parties agree that any dispute will be heard.]
This Agreement constitutes the entire agreement of the parties (superseding all prior
agreements and understandings, oral or written) with respect to the subject matter hereof and
shall not be modified or amended in any respect except in a writing
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
stated above.
Being of sound body and mind and able to legally enter into a contract, I agree to be bound to
the above Agreement.
Profit Sharer
___________________ ___________________ ___________________
SIGNATURE NAME TITLE
Worker
___________________ ___________________ ___________________
SIGNATURE NAME TITLE
Witness (sign): _________________________
Print Name/Address: ______________________________________________
Witness (sign): _________________________
Print Name/Address: ______________________________________________
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