Ever felt that your real estate agent or broker wasn’t doing his job and you wanted to “fire” him? Usually firing him is often as simple as paying a penalty of 0 or less, but you have to carefully read the “termination clause” in his Listing Agreement. Have your attorney review it and, if necessary, go directly to the Board of Realtors® in your state if he is uncooperative.
Firing your realtor® usually requires a certified letter to the realtor® and/or his broker (boss) and may have additional requirements in some states to be legally binding on both parties. If you don’t get a “Signed Release” you might have to pay double commissions at your closing. A simple “It hasn’t worked, you didn’t perform as expected” should be enough when he asks why he is being fired. We have seen realtors® file liens against properties for unearned commissions even before a sale was made just to keep the homeowner from firing him.
Should you find a buyer during the Listing Period and you fire your realtor® to save the commission, you can expect to get sued and may lose in court. This is the same as telling a perspective buyer to come back after the expiration of the Listing Agreement to get a better price. Are you sure that buyer isn’t another realtor®? It may be costly to find out. Treat other people as you would like to be treated.
You may have had a misunderstanding of how a realtor® works when you signed the Listing Agreement, especially if an unscrupulous realtor® wants a listing badly enough, he may overstate the value of the property so the homeowner signs with him. This practice is called “buying the listing” and can be very hurtful to homeowners because their property doesn’t sell and stays on the market too long without offers.
Realtors® do not sell houses, they sell listings to homeowners, and the realtor® with the most listings, gets the most houses sold by other realtors®. It is industry knowledge that realtors® personally sell about 5% of what they list, but get paid on almost 65% of what they list because of other realtors selling their listings. Successful listing agents are often fired because they aren’t selling properties as such, just listings.
Generally, if you change realtors®, your MLS® listing will be pulled because you are no longer represented by a seller’s broker. An alternative to paying a full service agent, is to use a “flat-fee” MLS® listing agent and save ½ or more of the commission. A real benefit of this new MLS® listing is that your DOM (days on the market) counter starts over at zero and your listing appears on the “Just Listed” wire flash.
How could this unpleasantness been avoided? First, a homeowner should take it upon himself to determine the fair market value of his home. The key here is to not get an appraisal where the appraiser simply does a “drive by” and doesn’t see the interior of your property. With this limited information, he will evaluate your home based solely on the information he finds in the public record. The information in the public record does not take into account any internal improvements to your home or its condition, so ask for a “full appraisal”. Determining the fair market value of your home is critically important in selling your home whether you use a realtor® or if you do your own sale as a For Sale By Owner or “FSBO” to save the commissions.
Secondly, if you choose to use a realtor®, you should interview at least five to see what they offer. Look at their advertising package, its frequency, their experience, and their personal sales of their own listings. Just listing in the MLS®, on Realtor.com®, a yard sign, an occasional open house, and a listing in free magazines, is not enough. You can do all these forms of advertising yourself at much less than one-half percent (½ %) of your home’s value. If you are told by a realtor® that he has a buyer for your property, but won’t show your property unless you list with him, offer to sign a “single listing” agreement for his specific client only.
Thirdly, read the cancellation clause and have your attorney review it before you sign any Listing Agreement. A little time spent here can save you thousands of dollars later. Serious reasons for termination can include misrepresentation, acting in bad faith, or even fraud.
In summary, be in continuing contact with your realtor® and if you are unsatisfied with his performance, tell him so. If he is unresponsive to your requests, especially for an “Open House”, fire him immediately. If you do fire your realtor®, always get a Cancellation Letter or Signed Release so you know you are free to sell your home without paying a double commission.