When to Get Our of Your Brokerage Agreement? Before You Sign It!
During the last few months, I’ve gotten a bunch of calls from buyers and sellers who would like me to be their second, or even their third, agent. And when I ask the questions about the status of their current agreement with their last Realtor, they almost always say that it has weeks, even months, to go, but they plan to fire their agent.
Not so fast!
When you sign a contract with a real estate brokerage firm to sell your old house or help you buy a new one, it is just that, a contract. And it’s pretty binding.
The agreements are usually boiler-plate language drawn up by the local area Board of Realtors. One of the important functions is to ensure that the agent who you hire gets paid for his or her efforts at settlement. In the Washington Metro area, our forms allow the agreement to be canceled by “mutual agreement”. But the magic word here is “mutual”.
Some agents will turn their clients loose without a fight. And in many cases, the agent is more relieved to be free of the client than the other way around. But more often, the agent or the broker does not make it easy.
There are times when you should be able to negotiate a release with your agent’s broker:
- If the agent clearly abandons you and does not do whatever he said he would do. In this case, he could be embarrassed into letting you out of the contract, but some agents are hard to embarrass.
- If you agree to reimburse the broker for expenses they have incurred on your behalf they might let you off the hook.
- The agent does something that harms you in some way, they might let you go if you agree not to sue them.
While you might start off your agreement with good faith and optimism, the market place could wear you down. You may find yourself in situations where you are frustrated and blaming your agent for what is going wrong in your sale or purchase. The agent may have little habits you can’t stand or could be a scarey driver. But if you think you can just walk away on a whim or because you think you’ll be able to do better with someone else, don’t count on it.
The time to think about the possibility of getting out of a real estate brokerage agreement is before you enter into one. It is not unreasonable to ask the agent to include a provision that allows you (and the agent) to cancel unilaterally, although the broker might want to attach some reasonable strings to the release.
In both my listing and my buyer broker agreements, I allow the client or myself to cancel up until the time we get an offer they accept (for sellers) or make an offer that is accepted (for buyers).
It is important to keep in mind that, when a professional relationship is not working, it may not be the agent. Usually there is some sort of communication difficulty or unrealistic expectations on the client’s side – although the agent is almost surely contributing to the issues.
So my first advice to the people who call me because they are fed up with their agent? Start off by having a candid conversation with your current agent. Lay out what is not working for you. Give the agent the opportunity to make things right, and if that does not happen, then explore canceling the contract and moving on.