Real estate agent with no listing agreement wants to sue seller for commission


At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Dear Real Estate Adviser,
We called a real estate agent to estimate our home’s value and decided to sell using him. But a week later, we found a buyer ourselves and told the agent to take our house off the market and that we’d pay for any expenses he incurred. Though he knows we found the buyer, he said he’ll take us to court if we try to cut him out. There was no listing agreement. Can he sue?
— Otto D.

Dear Otto,
Just about anyone can sue anyone for any real or perceived affront, and that goes for this agent. But he probably knows that without a signed listing agreement, he has little to no chance of prevailing. His meager odds may be slightly increased if he can produce copies of emails or texts sent by you specifically outlining the desired length you wanted him as your listing agent, since some courts are more sympathetic to verbal agreements.

But the agent in this case, after all, wasn’t the “procuring cause” of the buyers who approached you. And in the real world, commissions aren’t promised, they’re earned. To top that off, the overwhelming majority of courts hold the position that if there’s no contract in a real estate agreement, it doesn’t count, regardless of what was said.

RATE SEARCH: Thinking about buying a new home? Get prequalified for a mortgage today!

Real estate disappointments common

I get loads of letters from buyers who were told by text or on the phone that they had the best offer on a for-sale house, only to get beat out at the last second by a bigger, better one. That’s how things go in a sellers’ market. No contract, no deal. The courts would be filled to the brim with “he said, she said” cases otherwise.

Probably the best way to handle this for the agent would have been to offer to help you or the buyer walk through the transaction for a flat fee. But his talk of a lawsuit shot that option for him and it’s cast him as an adversary. What happened may not be fair in his eyes, but it is very common in the business.

The likeliest scenario

I don’t think he will sue. Just reimburse him for any provable listing expenses (yard signs, etc.) and explain, “Sorry, we had no contract and you didn’t find us the buyer anyway.” I think he is bluffing. But just in case he decides to sue, have a look at your text and email threads involving him to see if you made any promises. Obviously, you’d need to consult a lawyer if he — oy — goes forward. 

But again, I think he would be foolish and it would be expensive to mess with this in court. If he feels slighted, that’s too bad. He’s partially responsible for working without a listing agreement, especially in the shark-filled waters of real estate. I do recommend you at least have some professional guidance to shepherd you through what can be a very delicate transaction.

Good luck!

RATE SEARCH: Thinking about refinancing your mortgage? Compare mortgage rates on Bankrate today!

Ask the adviser

To ask a question of the Real Estate Adviser, go to the “Ask the Experts” page and select “Buying, selling a home” as the topic. Read more Real Estate Adviser columns and more stories about real estate.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.