Tuesday Apr 19 2011
The Real McCoy: Does agent still get paid even when not used?
By: Kari McCoy, Special to the Telegraph
Dear Kari, My husband and I had our home listed but it did not sell. The listing contract was over and we were thinking that we should just give ourselves a break. Then three weeks later we received a knock at our door and it was a couple saying they saw our home when it was listed with our agent. Now they are going to make an offer not using any Realtor. Our question is, do we still need to pay our former Realtor a commission if this particular couple buys our home? Answer: The response to the question above is most likely, yes. The most popular type of a listing agreement is called the exclusive right to sell. It gives the broker an exclusive right to earn a commission by representing the owner and bringing in a buyer. They do this either through another brokerage firm or directly. The owner pays for both the listing and the selling broker’s commission fee. The owner cannot sell the property themselves without paying a commission, unless an exception is so noted in the original listing agreement. In most exclusive right-to-sell-listing contracts there is a start date, an expiration date and a protection period after the expiration date. This protection period is for after the listing has expired and it is meant to protect the listing agent. In the event the seller enters into a contract to sell, convey, lease or otherwise transfer the property to any prospective buyer, and that buyer was shown the property during the listing period either by their real estate agent or by a cooperating broker, then the commission is due the former agent. This rule only applies if the listing Realtor gives the seller the prospective buyer’s names in writing no later than three calendar days after the expiration date of the listing. Some folks may think this is not fair, after all the listing has expired. The protection period section is in place to prevent a seller from taking advantage of an agent after they have marketed their home. It is a known fact that many times after a property has been marketed some of the buyers may not have been ready at that particular time. Later the buyers have a better circumstance and are ready to come back to the property. Be sure to ask questions of your listing Realtor. She or he will make sure that you fully understand what you are agreeing to before you sign. It is possible that you and your Realtor will make some changes or exclusions. Remember you and your real estate agent are on the same side and want the same goals — your home sold in a timely manner and for the most amount of money. Please note that not all forms are the same. Contact your local agent or your attorney for more information. Kari McCoy owns the Kari McCoy Group, residential real estate at Lyon and can be reached at (916) 941-9540 or e-mail firstname.lastname@example.org.