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The Seller vs the Agent - When Things Go Wrong

So, you’ve done your homework, gotten your home in good selling condition, and listed it with a reputable real estate agent. Chances are, it’ll sell without a hitch. But what if it doesn’t? What if the only offers you receive are too low to consider, or worse yet, no one makes an offer at all? And what if you do accept an offer, but the deal falls through somewhere along the line?

Whatever the reason, your initial disappointment will probably lead to a round-robin of second thoughts. Maybe it was the price (too high) or the style (too weird) or the location (too scary). And maybe it was none of the above, but rather, the fact that your agent simply wasn’t too good.

It happens. Real estate agents are people, and some are simply better at their job than others. Some know how to price and market homes and some don’t. Some work well with other agents and some don’t. And some stay focused on their clients’ wishes while others all but disappear after the listing contract is signed. At some point, you may come to the conclusion that it’s time to terminate your listing contract.

It’s not hard to do, but before you head down that road, think about why you’re doing it.

 

Avoiding the Blame Game

Anyone who has sold a home can tell you: There’s a bit of an adrenaline rush when your house first goes on the market. The phone starts ringing, buyers come calling, maybe an offer or two gets tendered. And then, after the listing is a few weeks old, the phone stops ringing, showings decrease, and your agent is suddenly too busy to take your phone calls.

Sometimes, it really is your agent’s fault. They may be unfamiliar with the market or unwilling to offer buyers’ agents a reasonable commission. And, unfortunately, there are agents out there who are much better at snagging clients than actually selling homes.

If that’s the case, it’s better to get on the phone and express your frustration than to stew silently, bide your time, and cancel the contract. As one longtime agent notes, “A good agent will listen to criticism and do something about it.”

Sometimes, though, it’s the seller who needs to listen. Some people simply don’t want to hear that their asking price is too high or that they need to make much-needed repairs before showing their home. When the house doesn’t sell, it’s all too easy to blame the messenger. 

The answer, of course, is to communicate openly and honestly — both with your agent and with yourself. Says the agent, “You have to ask yourself: Am I firing my agent because they’re doing an incompetent job, or because I don’t like what they’re saying about the price or the marketing plan?” You may want to think about these things at the beginning of your listing. Sometimes a good agent gets the message right from the start that you are unwilling to lower your price or accept lower offers.  Be prepared to talk to your agent before it gets to the point of letting them go for someone new and having to start all over again.

 

Let’s Call the Whole Thing Off

Then there are those times when it just doesn’t work out due to a personality clash, work quality, or other issue. (Hopefully, you did your homework on how to choose an agent and interviewed at least three to get a sense of how they operate.) When that happens, it’s just time to say goodbye.

Typically, all it takes is a written request to the agent stating that you want to terminate the listing. (It’s effective immediately, unless you state otherwise.)  They may try to talk you out of it or suggest someone else in their office, but if you want to make a complete break, they’ll usually agree to the request.

There may, however, be strings attached, the biggest of which is known as a “protection clause.” Simply put, these clauses state that if your house subsequently sells due to the previous efforts of the agent, that agent is still entitled to a commission. In other words, if the buyer saw the agent’s yard sign or attended his or her open house, and later makes an offer, even after the termination date, you’ll still have to pay their commission — on top of any other commissions you may owe on a subsequent contract.

There’s nothing inherently wrong with protection clauses — good agents deserve to be protected from sellers who abuse the system — but you do need to be careful. Read all listing contracts completely and refuse to sign any that include an excessively long protection period (e.g., six months).

And while you’re at it, be sure to read the contract’s section on conflict resolution. Most call for binding arbitration (i.e., an uninvolved third party decides the outcome), which means you can’t sue or go to court. Then again, as unpleasant as terminating a contract may be, going to court is usually worse — and expensive, to boot. As the saying goes, if you have to go to court to resolve a contract dispute, you’ve already lost.

 

 

Next article: Buying and Selling at the Same Time

Previous article: How to Negotiate With a Listing Agent

 

 

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  • Last edited November 12 2008
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