real estate

Can I cancel contract with listing agent?

Steve McLindenDear Real Estate Adviser,
How many days do I have to cancel a listing contract with an agent for a property I am selling?
-- Marie

Dear Marie,
Sorry to hear about the apparent hiccup in your sale. There's no multiple-business-day cooling-off period in which you can cancel a listing-agent agreement without justification. (This makes a real estate listing unlike home equity loans, lines of credit, time share purchases and certain vacation rentals, which do have rescission periods.) You have a contract that spells out the agent's listing period and duties. Technically, you must fulfill the contract unless that agent has somehow broken the contract terms, which seems unlikely in such a short period.

However, as most listing periods in this still-stubborn sales market are 90 to 180 days, you don't want to be saddled for months with an agent you're unhappy with. So here are a couple things you can try to cancel the contract. First, talk to the agent immediately so he or she won't invest a bunch of money and legwork trying to peddle your place. Explain your situation, whatever that may be, and that you want to cancel the contract. Most agents don't want to work for someone who doesn't want them, and they will typically let you out of your agreement, particularly if the agent is part of a large agency. Such agencies don't want to foster ill will and realize that an agent needs a buyer's cooperation to make a sale anyway. Be forewarned that the agent may try to ease your concerns and vigorously try to talk you out of your desire to cancel the contract, so you'd better stick to your guns if you truly want out. Then get that cancellation, which is usually called a "termination of agency agreement," in writing.

If the agent balks, you could try to negotiate an agreement to cancel the contract while compensating the agent for any expenses incurred. After all, a seller's second thoughts are accountable to that seller, not to the agent. If all else fails, contact a real estate lawyer. Because real estate brokerage is a reputation-dependent business and most savvy agents know having someone taking legal actions or filing complaints means bad mojo, it likely won't come to a lawsuit.

If you have any hidden motivation aside from second thoughts or your agent's ability (or lack thereof), then that's another matter. If, for example, you simply want to sell the place to a friend or relative and save on the agent commission, and you proceed to do so soon after you cancel the contract, the agent may find out and come after you. Similarly, if you immediately try to put the place back on the market using a different agent, your original agent may try to go back and enforce the contract. Sometimes, people simply take their homes off the market for the balance of their original list period to avoid such "misunderstandings." If your contract is relatively short and you can afford to wait, that's not a bad move.

My only other suggestion is to not list your home again unless you are absolutely sure you want to sell it, and you have settled on an agent after interviewing at least three. When and if you do put it on the market, make sure you defer to this thoroughly vetted agent's pricing strategies -- not some pie-in-the-sky pre-2008 pipe-dream price.

There's no pointing in wasting everyone's time if you resolutely want to cancel the contract. Good luck!

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