How to fire your real estate agent

Dec 15 2011 - 12:27pm

Between listing and sale, some home sellers find that the relationship with their real estate agent sours. As much as they would like to, homeowners can't just walk away from an agent.

Typically, relationships between agents and their clients turn south because of poor communication, says Jennifer Chiongbian, a broker with Rutenberg Realty in New York City. The problem of unresponsive agents "plagues our industry," says Chiongbian, who estimates that 70 percent of dissatisfied sellers blame their agents for a "lack of communication."

When listing a house for sale, a homeowner does two things. First, the seller enters a legal agreement with the broker. Second, the seller starts a business relationship with the broker. The distinction is important, says Joe Adkins, owner of The Realty Factor, a real estate brokerage in Altamonte Springs, Fla.

"Most agents know when the seller doesn't like them or doesn't want to deal with them any longer as their real estate agent," Adkins says. "So if the seller asked nicely and explained the reasons why they want to cancel the listing contract, most real estate agents would honor their request. I know I have in the past."

It's a good idea to cancel the agreement in writing to avoid any misunderstandings down the road when, and if, the seller eventually finds a buyer.

Chiongbian says asserting a breach of contract usually isn't the best way to end the relationship because that kind of dispute can quickly escalate into a lawsuit if the seller sells the house and refuses to pay the fired broker a commission.

You can make the case for a breach "if the agent is not doing their job sufficiently," Chiongbian says. "But breach does not mean being able to move a listing in a reasonable amount of time because the property is so overpriced. Breach is more likely if the agent hasn't met simple service requirements such as responsiveness, taking photos of the property, showing the home, executing the proposed marketing plan or honoring their fiduciary responsibility to the homeowner."

The listing agreement might call for early termination fees. The fees can range from $295 to about $495, says Pete Adams, owner of Benefactor Realty in St. Petersburg, Fla.

Not all brokerage firms use termination fees, but the practice is common around the country, says Adams, who advises homeowners to strike out the fee before they sign the listing agreement.

"Keep in mind that the agent may have spent considerable money upfront to market the listing," says Sam DeBord, managing broker at Wiegand and DeBord in Seattle. "In that case, there may be more hesitance to allow a seller to cancel a listing in a short amount of time without finding some way for the agent to recoup their costs."

Photos, labor and a few ads can easily reach $1,000 or more right off the bat, DeBord says. If the broker can't sell the home by the end of the contractual period, then most brokers "understand that those costs are unrecoverable." But if the seller tries to terminate the agreement soon after listing, a lot of brokers are likely to feel duped, DeBord says.

Usually it takes awhile before a seller becomes dissatisfied with the agent, and if the contract is almost over anyway, it probably makes a lot of sense to just let it lapse. But homeowners who plan to turn around and sell the house themselves right after the contract ends should be careful, says Lee Wilber, an agent at Hilton Realtors in Springfield, Mo.

"Most agreements used throughout the country will offer a protection period for the agent" for up to six months, Wilber says. If the owner sells the property without an agent during that period and the buyer learned of the property while the listing agreement was in effect, the seller might be required to pay the broker a commission.

Distributed by Scripps Howard News Service. Reach Michael Estrin at editors@bankrate.com

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