So your home is for sale, and you've signed a contract with a real estate agent, but you were actually able to nab a buyer through your own efforts. Maybe it was through word of mouth or your aggressive push on Facebook (you should really apologize to your friends for posting so many pictures of your house!), but someone is writing you an offer and really wants to buy your house. Having found a buyer on your own, are you still legally obligated to pay real estate fees or commission? Here's how to know if you're on the hook.
Read your listing agreement
In most states, a seller and an agent draw up something called a listing agreement. The listing agreement details the rights and responsibilities of the seller and the broker, and usually outlines the circumstances when a broker is due a commission.
"If it is an open listing or an exclusive agency listing, the seller can sell the property and not have to pay the broker a commission," says David Reiss, professor of law at Brooklyn Law School .
Things get tricky if the listing agreement confers an exclusive right to sell. This means the real estate agent has the sole right to sell the property. All offers must go through him or her, and for any sale, you're obligated to pay the agent the commission spelled out in the contract, according to Marc D. Markel, a board-certified Texas attorney in residential and commercial real estate law. Agents rely on these exclusive listing agreements to avoid putting in what can be months of free work without seeing a payoff. For this reason, the agreement outlines the many ways an agent earns a commission, including what happens if the seller breaches the exclusive agreement.
If the sellers do find a buyer on their own, despite having a contract with an agent, they may be able to negotiate a reduced commission with the agent. But the sellers should be up-front about their potential to find their own buyer when drawing up the exclusive-right-to-sell listing agreement, says Markel. Maybe they know of a friend of a friend who is looking for a house, or they plan on marketing their home on social media.
If the sellers feel as if they are doing all the work, they might also be able to modify the existing agreement and add a termination if the broker doesn't meet certain obligations, like selling the home within a certain time frame, says Sandy Straley, a real estate agent in Layton, UT. Other obligations for the listing could include organizing open houses, creating and distributing printed materials, and even the posting of videos shot by drones, says Markel.
Talk to your real estate agent
If you feel that your agent isn't performing to your expectations, engage in an open conversation with them explaining what you feel isn't being done. Refer to the services spelled out in the contract. It's possible that miscommunication is the problem, and tour listing agent should get the opportunity to make it right. If you still don't see results, talk to other brokers at the firm carrying your listing and see if they can meet your needs.
The cancellation clause
If all else fails, and you're still not happy, check to see if your contract has a cancellation clause. Depending on the situation, some agents may agree to nullify the contract, although they may charge you an early cancellation fee, says Realtor® David Welch, with RE/MAX 200 Realty in Winter Park, FL. If an agent won't release you from a contract, try speaking with a lawyer about breaking it. And remember, all listing agreements eventually expire, within three months to a year.
The post Selling Your House Privately If You Have a Listing Agent: OK or a Big N-O? appeared first on Real Estate News & Insights | realtor.com®.