Do you have the sneaking suspicion that your selling Realtor is being overpaid? Did you realize that your selling Realtor simply posted your property online and is just waiting for the phone to ring? Here’s how to fire your selling Realtor in NYC and save your home equity from high broker fees.
You will no doubt have signed an Exclusive Right To Sell Listing Agreement with your Realtor’s brokerage. This agreement can vary quite substantially on both length and how onerous the terms are. However, most major brokerages these days will try to keep it simple and have language that states:
“This agreement may not be changed, rescinded, or modified, except by written notice signed by both of us.”
This can be interpreted quite harshly if you chose a really nasty real estate listing agent. In theory, your selling Realtor could refuse to cancel the agreement and you’d be stuck with the agreement until expiration. However, in practice a selling Realtor would not invoke such extreme measures with a client. Unlike in France, in the US the mantra of “the customer is always right” still has some sway!
The best way to approach the firing of your selling Realtor in NYC is to have an honest conversation with the Realtor about why you wish to exit your contract. If you have valid reasons or complaints about why you need to exit the contract or why the service has been sub-par, the Realtor will often agree to waive the contract and let you out.
If you have any issues with the selling Realtor, you can always speak with the selling Realtor’s manager who will typically be the Broker of Record of the particular office your Realtor works at. The managing broker will usually be quite reasonable and will let you exit the contract.
Once you’ve gotten confirmation from the Realtor and his or her manager that they will release you from your contract, you should send a confirmation email and make sure they respond in writing acknowledging the cancelation of the listing agreement. Here is a sample email that a seller may send to their listing broker after having agreed to cancel the agreement by phone.
Nice to speak with you today. We understand that the New York real estate market has changed in the past few months. Thus, I am writing to confirm that pursuant to our conversation, we have decided to end our contract with your firm as of today, March 13, 2017. This is a confirmation that you will de-list our apartment at 111 East 111th Street, Apt 11 and end our contract without penalty or obligation.
It was a pleasure to meet you and to work with you and your team. I hope our paths cross in the future. Best wishes for your continued success. Please send the review links. Katie and I would be happy to write an excellent recommendation for your firm. Joseph.
Yes. Most listing agreements will have expense reimbursement clauses that come into effect should the property not sell. This makes sense since real estate brokers typically only get paid if a property sells, yet make substantial monetary and time investments in marketing your property even if it doesn’t sell.
Therefore, it is only fair that real estate brokers are compensated for the cost of marketing your property if it doesn’t end up selling.
The amount of the marketing expense reimbursement can vary up to $1,000 or more. Even though it is a meager sum compared to the commission the Realtor would have earned had the property sold, it is still typically enough to cover at least the cost of professional photographs and the floor plan drawing.
Here are two examples of marketing expense reimbursement language that can be found in Exclusive Right To Sell Listing Agreements in New York City:
In the event the property does not sell during the term of this agreement or any extension hereof or during the protection period set forth above, owner shall nonetheless be obligated to reimburse broker for marketing expenses in the amount of $500.
In the event the property does not sell during the term of this agreement or any extension hereof or during the protection period set forth above, you shall nonetheless be obligated to reimburse Broker for expenses in the amount of $500. If you pre-pay this in advance and the property sells, you will be credited back the amount at closing.
Most listing agreements will typically allow the selling Realtor to provide you with a list of buyers’ names whom they’ve shown the property to during the listing agreement. If you sign a contract with a buyer on the list within a certain period of time after the listing agreement has expired, you can still owe commission to your selling Realtor.
Here are two examples of protection period language that can be found in most Exclusive Right To Sell Listing Agreements in NYC:
PROTECTION PERIOD – If within 90 days after the expiration of this agreement the property is sold, exchange or leased to or with any person or party to whom the property was shown during the term of the listing, Owner agrees to pay Broker and, if applicable, a Cooperating Broker the commission set forth herein as if the Broker has made the sale, exchange or lease.
Within three (3) business days after the expiration of the listing term, we shall deliver to you in writing a list of no more than six (6) names of persons who inspected the premises during the listing term. If within ninety (90) days after the expiration of the listing term a contract is signed to sell the Property to a person on said list, we shall be entitled to the Fee for Service referenced in this agreement. You represent and warrant that if a new exclusive listing agreement is executed with another exclusive broker (the “New Exclusive Broker”), you will notify the New Exclusive Broker (a) of the existence of this provision and (b) that we may negotiate directly with you with respect to the customers on the list during the ninety (90) day protected period.
Disclosure: Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).