November 27, 2020...8:49 am

A Listing Agreement May Terminate

As a general rule, exclusive contracts have a pre-defined period (often 2 to 6 months) when the contract is in the process of expiring. If your home is not yet sold, you can choose another agent without penalty. If you want to terminate your contract prematurely because you want to work with another real estate agent, there could be consequences. For example, if you work with another real estate agent and sell your property, your first real estate agent might say that commissions must be paid because the brokerage company has not agreed to exempt you from the obligations of your contract. You could be on two brokers because of the commission. Brokers will sometimes try to force the seller to allow them to continue the agency relationship by threatening the seller with the liquidated compensation clause in the list agreements. Such clauses often claim to give the listing broker a full commission when the seller terminates the offer. Regardless of the applicability of these clauses, their use to threaten customers raises serious agency obligation issues. The problem with the threat to your own client is that if you succeed, they remain your customer.

If they remain your client, you are required not to threaten them, especially if the threat is that the agent will make statements about the client`s legal rights. “99% of the time the listing agreement is a rating agreement in which list agents are responsible for everything,” Said Lenchek. Some contracts have automatic renewal clauses that automatically extend the list period by a certain amount, for example. B 30 days, in the absence of sale. Automatic extension clauses create a contract with no actual expiry date and are not in the seller`s interest because the broker is not motivated to sell the property within a reasonable time. As a result, in many countries, extension clauses are illegal and most types of standardized real estate do not have the clauses. It is difficult for a seller to get out of a contract with his broker, to switch to an agent who charges less commissions, sell to a family member or friend, and try to completely avoid commissions or renegotiate the commission with the same agent. Most exclusive list agreements include a section on early expiration or cancellation. It is customary for the contract to expire within a certain period of time, such as six months, during which the seller can choose another representative without penalty. The contract may also list a cancellation fee to terminate the contract prematurely.