You did the research, found a real estate agent you thought was right for the job, and signed an agreement to let the pro list your property. But if time passes—and if your house doesn’t sell—you might start wondering: Can you cancel that real estate contract—and if so, at what cost?
In a perfect world—one in which we all read every bit of fine print before signing a legally binding document—you would already know the answer to these questions because they are in the listing agreement you signed.
But this is the real world though—a world in which many of us sign things in a hurry, not expecting to have any issues. If that’s your situation, here’s what you need to know about canceling a listing agreement.
What’s In Your Listing Agreement?
Of course, no one can force you to sell your home, but real estate listing agreements are legally binding contracts.
Listing agreements vary among real estate companies, real estate boards, and cities and states. In general, though, they all typically include a time frame they cover for a particular property. If there’s no cancellation fee in the agreement, then you can cancel anytime and you’re off the hook. However, many state a fee the seller will be charged if the agreement is canceled before that expiration date.
The fee often covers an agent’s time and expenses. This may include the costs the agent incurred to put your property on the multiple listing service in your area, as well as forms, photos, videos, brochures, and other means to promote your home. In some cases, the fee will be a percentage of the listing price.
If there are fees outlined, you can always wait out the contract to avoid any chance that you’ll have to pay them. In many cases, however, you may be able to work something out with your real estate agent even if you cancel early.
“If you cancel early, chances are the agent might just let you off the hook for the remainder of the contract—at least most of us do—especially when the homeowner requests this cancellation,” says Maria Jeantet is a real estate agent with Coldwell Banker C&C Properties in Redding, CA. “It all depends on the approach you take when letting them know that you wish to cancel.”
Reasons To Cancel A Listing Agreement—And Alternatives
The reasons people want to cancel a listing agreement vary. If it’s because you decided you don’t want to sell your property after all, that’s one thing. But if you want to cancel the listing because you’re unhappy with how your agent is promoting it or are disappointed that it’s not getting as many views or offers as you had hoped for, that’s another. The latter can often be worked out with your agent through clear communication about what you’re unhappy with and the changes you’d like to see.
Jeantet says the best policy is to always be straightforward with your agent.
“Keep it clean. Either have a heart-to-heart talk with your current agent about canceling, or talk to them about getting more out of his/her service to you,” she says.
If that isn’t effective, you can also consider contacting an agent’s brokerage firm (if your agent isn’t the broker/owner) to discuss the issues, and perhaps have another agent assigned to you.
If nothing can be worked out, then canceling may be in your best interest, even if you have to pay a fee.
Just be sure to get the cancellation in writing because if you list your house with a new agent within the time period covered by the listing agreement and you don’t have a written cancellation from your current agent, your current agent can claim commission fees when the house sells. Again, look at your listing agreement to see what it states.
Not all relationships with real estate agents work out, people change their minds, and circumstances shift. That’s why it’s so important to thoroughly do your research when it comes to selecting a real estate agent in the first place and to carefully examine what’s in a listing agreement before you sign it.
Courtesy of Realtor.com