Buying or selling your home is a daunting task. Working with the right broker is not just essential to a successful deal, but it’s also vital to helping make the process as smooth as possible for you. So, what do you do when things aren’t working out with your real estate broker? Below are a few key factors to keep in mind when breaking things off with your broker.
Buying vs. Selling
When selling your home, there is often an Exclusive broker agreement between you and your broker. Generally, there will be a contract involved here. The terms will usually include a range of time for exclusivity with your broker. Every agency will have their own contract. The main piece is that for every buyer the broker brings in during these terms, they are entitled to a commission.
Buyers have a little more flexibility. It’s rare that there would be an exclusivity contract between a buyer and a broker. As a buyer, you can choose to work with any broker or agency.
What can go wrong?
Why would you want to dissolve your relationship with a broker? There are many factors, the biggest being no sale has come through. As a client, you made become dissatisfied with your broker’s efforts, their targeting, how they are marketing your property or how they are communicating with you.
There are times when a seller may sign with a broker, only to have them disappear or delegate work for your property to their team instead of focusing on it themselves. These are all things that can cause a seller to want to break up with their broker.
Stay ahead of the problem
When you first sign on with a broker, make sure that all of your expectations are clear. Make sure they know what your goals are, how often you want to meet and communicate and what you want your working relationship to be. Back it up in writing as well. Laying out your expectations clearly can help you avoid a problem from forming. However, if you’ve already done this and are still having a problem, you know it’s time to walk away.
Talk through the problem
Before you end your relationship, sit down in person with your broker. Too much can be lost in an email or text. Go through point-by-point on what you are having issues with. Be clear on where they did not deliver on your expectations. Have examples and be able to back-up what you are saying. Sometimes a serious conversation can turn things around. If not, you’ve at least established your concerns clearly.
Breaking a contract
If you’ve signed a contract you are obviously going to be bound by the terms. Most attorneys will include a termination clause for seller clients with a 30-day notice period. This gives you a clean out should you need it. Most brokers will likely require that 90 days first pass before termination can be executed.
If you don’t have a termination clause, it doesn’t necessarily mean you’re stuck. If both parties agree that the relationship isn’t working out, you may simply be able to mutually agree to terminate the agreement.
No matter what your reasons for dissolving your relationship are. Make sure you put it in writing! You need to ensure that you have documentation of how and why the broker did not live up to their end of the agreement. Also, make sure you stipulate that when the property does sell, that broker is not entitled to any commission on it.
You may still have to pay
Even if you’ve moved on to another broker, your previous one may still have claim to a commission. In this case, brokers submit a “protected pool of potential purchasers,” a list of usually no more than six potential buyers. If one of those buyers signs a contract for the property within a set period, usually 90-180 days, that broker is entitled to a commission. The buyer just has to go into contract, not close on the apartment, for the broker to get this kind of commission.