Do I owe my listing agent money if the house doesn't sell and I relist?

Question

I am trying to sell my home and my broker/agent will not hold an open house, will not run print ads, and has only got us ONE SHOWING in 2 MONTHS. I am waiting for the contract to expire to get a new agent. My question is will I owe her any money at the end of the contract? Is it customary to pay a listing charge if you decide not to sign an extension of the contract? The contract states "seller shall pay in cash to broker for services a total commission as follows:$1500 listing broker." Doesn't commission mean you sold something??

The contract is vauge. It just says for services rendered. It doesn't say at closing or anything like that. It just says a commission for services.

Nothing in the contract listing specific marketing plan. Just that she has copyright over the pictures and fliers.

A couple more things: the agent is the broker and we are offering 3.5% to the buyer's agent. I just have this sinking feeling that this is a con where she does nothing but put a sign in the yard with some fliers and slaps it on the MLS and when the 3 months is up and you are angry that you have had no action, she tells you to pay $1500. Sounds like a no-work way of making money. She was a recommendation though. I Googled her before signing the contract I couldn't find anthying negative.

Answer 1

I doubt if you owe anything just for a listing....but if you feel unsure about it then by all means call that broker and ask them to be sure.

Homes just aren't selling now so it may take several months for you to sell that house. Some people have cut the cost of the home by 10%, others have added vacations or cars or added furniture and appliances to the deal to sell the home. But still many aren't being sold because of the foreclosure problem going on right now.

There's always the possibility you could do a "rent to own" and have your broker see if they can find a renter for you. They're supposed to run a background and credit check of whoever rents it. They they rent to own they will take better care of the property. And there is a fee to the broker monthly on a rent to own.

Yes, commission does mean you sold something. That's why I don't believe the broker will be collecting anything.

Answer 2

It is not customary to charge for listing services, unless the property sells. But each brokerage can pretty much charge what they want.

What I would suggest is to visit the Agents office (unannounced) and ask to speak with the Broker. Tell the broker you want to know if signing that agreement means you owe them if the house doesn't sell? And is there a charge for canceling the listing agreement? If the answer is no, then ask the Broker when his company will provide an Open House with an Ad in the local paper? Hopefully that will answer your questions. If not, simply ask the Broker for a cancellation of listing, sign it and leave.

But let me say this; this is the toughest market I have seen in all of my 20 years in the business. I have 6 listings, only one has received showings and a low low low ball offer. One listing (my daughter's townhouse) has had NO showings in over 3 months. Even running ad's and having open houses didn't bring in a single person. And frankly, print ad's are worthless and expensive. Most buyers today are searching on the Internet, 85 % ! So that is where I am putting my ad dollars. I don't get paid until I sell something, it's a fact of life as a Realtor.

I wish you better luck and hope your home sells faster! If I can help further, just email me.

Answer 3

Many of the "flat fee" agencies simply charge for placing the property in the local Multiple Listing Service. It's not a bad deal for people that are going to do most of their own marketing and negotiating, so long as you realize what you are getting for your money. The "flat fee" or discout brokers often charge whether or not your property sells.

Also, I see nothing there about a commission to cooperating agents. If there is no "co-op", then any agent that is not part of that agency has no way of getting paid for his/her services unless the buyer foots the bill. Most of my buyer clients do not want to see houses where the seller is not offering to pay for my services.

(While I hate to sound mercenary, I'm not doing this for my health. I have to earn a living, and every buyer I bring means between 50 and 100 man-hours researching houses, showing houses and doing the various other things that I need to do to maintain my business, and I've got other business expenses as well.)

The more traditional program is where the listing brokerage gets paid a percentage of the selling price at closing, and splits that percentage with the agent that brought the buyer.

While those percentages are negotiable, I (for example) negotiate based on the amount of effort that the seller expects of me. For $1500, the most a seller would get from me would be input to the MLS, signage, a keybox, some basic flyers and help with negotiating the purchase and sale agreement. (And that only if it were for a friend or former client. - Basically, $1500 would barely cover my costs, and I'd normally just turn down the listing.)

A decent print ad costs me about $500 per month, a half-day open house costs a hundred or so, plus about six hours of my time (when I bill by the hour, I charge $100 per hour - remember, I've got business expenses to pay out of that). If I'm charging my normal percentage commission, all that comes out of my cut, and if the house doesn't sell, you pay me nothing.

Much as we like to be friendly with our clients, this is a business for us. If I don't make a decent return, then my mortgage doesn't get paid and my family doesn't eat.

Answer 4

Wow! I've never heard of that. Granted laws vary from state to state but again why would you pay a Realtor who didn't perform their duties?

My biggest concern is that you signed a contract stating that you would do just that! Rather than brow-beat you over a mistake let's figure a way out.

Somewhere in the contract it should state what the Realtor agrees to do for you to market and ultimately sell the property. Did they live up to their end of the bargain? If not, I think they would be in violation of the agreement and therefore not entitled to any compensation.

If they did perform the duties agreed and outlined in the contract, check with the state board of Realtors and find out if the fees can be charged legally. I'm of the thought that they can. Realtors as a whole are a pretty reputable bunch. I don't think they would jeopardize their license or reputation to make an extra $1,500. It's just a first for me.

I hope it turns out in your favor.

Answer 5

Maybe. Usually the listing agreement says the real estate company only gets paid if the house sells.

There are agent agreements that pay a flat fee whether or not the house sells. This fee is for a particular service and not necessarily related to the selling something.

Answer 6

I'd need to see more of the contract to know. Is that what's payable when it closes, or is that due whether or not there's ever an offer? I could imagine a clause requiring you to cover their costs, but that's a bit much to be their costs, especially considering only one showing.

Generally, once the listing expires, you don't owe them anything unless someone that viewed the property during the listing period buys the property within a reasonable time after the expiration of the contract.

Answer 7

Check your contract you signed...hope you read perior to signing. No he gets nothing until he sells, call the Real estate association in your town.