Home Sale Hindsight
Home Sale Hindsight
Q: I just found out that the contract my wife signed with the real estate agent was for a year. I always thought that six months was the standard. The real estate agent has not shown the house to anyone for the last six months. We've had only two showings from two other real estate agents. My six-month point is coming due on Dec. 22.
I was planning to get another real estate agent due to the lack of showings. What are my options with this contract and the one-year listing agreement? --Alan
A: You and your wife have a number of options, but first I'd like to address several issues.
As far as what is "standard" in terms of term for a listing agreement, the fact is, in real estate, and in contract law in general, everything is negotiable.
I also wanted to point out what may be a misunderstanding about the showings your agent has procured. You seem to be operating under the impression that your agent's primary job is to personally procure buyers and show them your home herself. In fact, your agent's primary job is to market the property, not just or even primarily to buyers, but to buyer's brokers.
Nearly 90 percent of the buyers in the market at large who are qualified and ready to buy your home are working with a buyer's broker; and probably 99 percent of such buyers are working with a buyer's broker other than your listing agent. So, not that it's significant enough to make much of a difference to your decision-making, but it is worth noting that you should probably tally those two lowly showings in your agent's favor.
One more thing that it behooves me to mention and for you to consider: Assuming your property is readily available to be shown, and is actively listed on the multiple listing service and marketed online, it is statistically much more probable that a lack of showings is due to overpricing than to any fault of your agent's.
It's one thing if a number of people are coming to your home and disliking what they see; that can be a property condition issue.
It's another thing if no one can find or adequately preview your home's listing because it's not on the MLS or on any of the other real estate search engines, or because the property listing online has no photos or insufficient listing information (do double-check your home's listing to ensure it has attractive photos, by the way).
But if all these basic things are in place and other properties in your area, complex and/or price range are selling in less than a six-month time frame (i.e., your market is not completely stagnant and your home is not located in an "unsellable" homeowners association), the chances are high that your property's price is the turnoff -- not your agent.
Here's how to know: Has your agent repeatedly recommended that you list your home at a price lower than its current asking price? Are the homes around you that are selling going for around the same price as your list price, or much lower?
Am I just being a bleeding heart, pleading with you to give your agent another shot? Not really. First off, it's you who will be seeking to break the contract, so you really should have a very strong reason for firing her before you try to negotiate a mutually agreed termination. (By the way, you should also be prepared to offer some reimbursement for her marketing expenses incurred, as an incentive for her to let you out of the contract.)
But more important, if pricing is the issue and you don't change that, you are going to be in the same exact position, just more frustrated, with a new agent, in six months. Further, if your plan is to get a new agent and reduce your list price, then you might as well reduce the price with your current agent and see whether that works before breaking your word and the contract.
Now that you've heard my two (thousand or so) cents, here are your options. (And by "your," I mean your wife's, assuming she's the owner of the place.) Simply tell your agent you would like to cancel the listing agreement and are willing to defray the costs she has incurred marketing your home.
Fact is, most agents don't want to work with a client -- especially a client who owns a hard-to-sell property, or one who insists on a too-high price -- who doesn't want to work with them.
If you do audit your listing and see that there are no pictures, or there are other valid complaints you have about the service you've received, mention it during your conversation with her -- give her real reasons why you want to cancel the contract.
Chances are good your agent will simply let you out of the contract; if they do not, speak with their managing broker or sales manager. Explain your reasons and express that you want to get out of the contract.
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