Recently, I got a call from a good client of mine. “Coop, help me please! I have a high-end house I have been trying to sell for a couple of months, but the agent is doing NOTHING! How can I fire her?”
My client (I will call him “Tom Seller” because that name reminds me of “Magnum, P.I.”) had signed an “exclusive” 6-month agreement with a Broker to list the home and was unhappy with how little work the Agent was doing to sell the house. The problem with agreeing to a 6-month exclusive agreement is that if anyone other than the Broker or her Agents sell the home, Tom Seller will still have to pay the Broker the full commission — even if Tom found the buyer all by himself! Three to six percent of his $900,000 selling price is a heckuva lot of money, and six months is a long time to wait while the Agent is not doing any work. What could Magnum…I mean Tom, do?
First of all, let’s talk about a few basics.
When listing your home for sale, you can do it yourself, or you can get help. In Florida, anyone you pay to help you sell your home
must be a Licensed Real Estate Agent or Broker.Basically, a Broker owns the company and is responsible for making sure its
employees (the “Agents”) follow all the laws. Your contract will be with the Broker, but you will usually talk to an Agent.
Now, it is not unusual for a Broker to require an exclusive agreement. In fact, it makes sense. If the Broker or his/her Agents are working hard and advertising to sell the home, they deserve to be paid for their efforts. You shouldn’t be able to have another Broker also selling the property and getting the commission. However, Tom messed up by not making sure the contract allowed him to find a buyer himself and not pay the commission to the Broker.
Tom Seller’s second error was to allow a 6-month contract. If the Broker can’t sell your house in 3 months, you need to consider finding a new Broker or perhaps even taking the home off the market for a while. A good, fair agreement would be for a 3-month exclusive right to sell, with language that provides that if the seller finds a buyer, the Broker does not get a commission.
Finally, my advice to Tom Seller was that if he was not happy with his Agent, he had a few options.
1) He could ask the Broker to give him a different Agent.
2) He could wait until the end of the exclusivity period and then simply not renew it.
3) He could have me review his contract to see if there were any parts of it that the Broker or Agent were failing to perform. Depending on what is in the contract, the Broker and Agent may not be required to do much…maybe the contract just says that they will list the property on the MLS and allow buyers’ Agents show the property to their clients. Before you ever break a contract, you really really need to have a lawyer look it over to make sure you can do so without penalty.
I also told him that if he wants to terminate the contract early, be prepared for a legal fight. The commission on his transaction is going to be around $54,000. That is a whole lot of money the Broker might not want to give up so easily.
The law that defines what Brokers/Agents must do is FL Stat. 475.278.