How does a homeowner terminate a listing contract

Question

I have never had this happen to me before LOL. However a homeowner who is currently under contract with another broker until July wants to use me to sell their home.

Does anyone know if they can get out of it? I read through the contract and there is no mention of cancellation or termination.

There is the following language under the broker fee paragraph: "The aforesaid fee shall also be due upon sale of the property to any person who was introduced to the PROPERTY during the aforesaid term or any extension or who entered into an agreement to purchase during the term, during any extension or within 180 days after expiration of the term or any extension, regardless of the date that title passes, except if the SELLER has entered into an exclusive agreement with another broker in good faith, in which case the BROKER shall be entitled to receive only the difference between the fee set forth herein and any lesser net fee paid to the other broker."

Would this constitute a way for them to end their relationship with their current broker and work with me? If yes and manage to get this to close who they have to pay the previous broker a fee?

Their current broker is charging 4% and I plan on charging the same.

Thank you

Greg H. · Answer

@Rich Hupper

Many Boards and Associations have strick rules regarding contact, soliciting and tampering with another Brokers listing.  Offering forms and assistance is clearly crossing that line

I would step away and inform the seller that you would happy to provide your services once they are not under a listing agreement with another broker.

John Thedford · Answer

That is not common. Most people would simply wait for the contract to expire or the property is sold. Every agency has their own terms for cancellation. In my listings my contract states the seller can cancel at any time without penalty or fee. If someone wants to cancel, they should be queried about what was lacking in the service by the agent. I would still smile, say no problem and cancel, but would want to know what I might have done wrong.

Malgorzata Sadowska · Answer

in Florida, the owner can cancel anytime.  Brokers have to make sure that there's no cancellation fee that the owner will be charged by the broker for the broker's advertising cost. Also, in our agreements the broker who was canceled on only gets the fee if the client was introduced to the property by them.  Easy way to verify that is to keep a list of who introduced which customer to the property. If that doesn't help, feel free to reach out to me and I can discuss further.

Rich Hupper · Answer

@Greg H.

I am not a realtor, so I shouldn't be bound to their code of ethics, regardless, these people are only interested in working with me because they do not like the performance of their agent. I never solicited them. They reached out to me because I think they forgot I was in the business at the time they listed.

I was really hoping someone could help me with the quoted legalese I pulled off their listing agreement. Perhaps I should have an attorney review it.

Greg H. · Answer

@Rich Hupper

Article 16 of the Realtor Code of Ethics

REALTORS® shall not engage in any practice or take any action  inconsistent with exclusive representation or exclusive brokerage  relationship agreements that other REALTORS® have with clients

Article 16 is intended to recognize as unethical two basic types of solicitations:

First, telephone or personal solicitations of  property owners who have been identified by a real estate sign, multiple  listing compilation, or other information service as having exclusively  listed their property with another REALTOR®

Rich Hupper · Answer

Hi Mindy

I have no broker to consult I am the principal broker.

After reading through the listing agreement it says the previous broker would only be able to collect a fee in the following situation.

" if the SELLER has entered into an exclusive agreement with another broker in good faith, in which case the BROKER shall be entitled to receive only the difference between the fee set forth herein and any lesser net fee paid to the other broker."

What I am confused about is the language " the broker shall be entitled to receive only the difference between the fee set forth herein ( in this case 4% ) and any lesser net fee paid to the other ( me ) broker "

The way I read this is, as long as I keep my fee equal to 4% or more the previous broker would not be entitled anything. The contract he entered into with the homeowner allows them to contract a another broker at anytime.

Mindy Jensen · Answer

@Rich Hupper , Greg gave some pretty solid advice. I was going to say the same thing.

How did this person come to be aware of you? The other agent will be unhappy to lose the listing, for sure.

Speak to your broker about the proper way to handle this transaction. The original listing agent may provide you or the seller with a list of people who have seen the home while it was listed under them, and if someone on the list buys the home, the commission belongs to the original listing agent.

Rich Hupper · Answer

@Greg H. good point Greg. I will give them a call tomorrow and see what they say about this.

Rich Hupper · Answer

Thanks everyone for the help with this. Would any happen to have a release from contract form I could provide my clients?

How does a homeowner terminate a listing contract

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