February 27, 2012
The road to buying or selling a home is often a long one. Along the way, you may discover that your relationship with your real estate agent
just isn't working anymore. Maybe the agent is moving faster than youâ€™d
like. Or theyâ€™re not as available as you need them to be. Maybe they
just donâ€™t get you.
Now what? Is it OK to break up with your real estate agent? And if so,
how can you gracefully end it? The answer depends on whether youâ€™re
working with an agent as a buyer or a seller.
Advice for Buyers
Real estate agents earn their commissions from sellers, which are split
between sellerâ€™s and buyerâ€™s agents. As a general rule, as a buyer, you
wonâ€™t be asked to enter into a contractual or financial agreement with a
real estate agent. Though there are some agents who ask buyers to sign
an exclusivity agreement, in which the buyer agrees not to work with
another real estate agent but this isnâ€™t the norm.
Instead, a buyer makes a handshake agreement with the real estate
agent. Youâ€™re basically agreeing to exclusively rely upon that agent.
And thatâ€™s fair. Agents often work hard and spend a lot of time engaging
with buyers, watching the market, writing contracts, showing
properties, reviewing disclosures, and so on. Imagine how theyâ€™d feel
after spending months working with a client, only to be informed that
another agent found them the home they want?
If youâ€™re not quite ready to be tied down to a particular agent, itâ€™s better not to engage one until you are
ready. That said, itâ€™s OK to look for agents even if youâ€™re a year away
from making a serious move into the market. Some buyers need data and
advice as they tip their toes into the market. Just be honest. A good
real estate agent will read your situation well and provide the
appropriate amount of attention. Theyâ€™ll act as a resource and be
available when you need them. A big turn off for buyers is an agent who
puts on the full court press when they are not nearly ready to buy.
Before you enter into a handshake agreement, do your homework. Ask friends for references or check out online agent reviews. Going to open houses
is a good way to meet agents who work in the neighborhood you are
looking to buy. Make sure you've picked the most compatible agent you
can find. Start slow and feel out the relationship. It is harder to
break up with your agent if you have too deeply engaged them.
As time goes on, you may find that the relationship just isn't working.
If thatâ€™s the case, just be honest and upfront before too much more
time passes. Offer the agent constructive feedback about why itâ€™s not
working for you, and give them examples. Itâ€™s possible after an open
dialogue the agent will do a better job for you. If not, at the minimum,
youâ€™ll have given the agent important feedback, which will help them do
a better job for the next client (in theory, at least). This way you
wonâ€™t be hitting the agent out of left field with the sudden
announcement that youâ€™re buying a house through another agent.
Advice for Sellers
Since the seller pays the real estate agentâ€™s commission, the seller
generally is required to sign a legal agreement with an agentâ€™s
brokerage firm. In most cases, the agreement is for six months. During
that period, youâ€™re contractually obligated to work exclusively with the
agent and brokerage firm specifically on the sale of your home. In
fact, even if you find a buyer on your own, (such as a friend), the
listing agent/brokerage firm is still due their commission.
Just as a buyer must do his homework, itâ€™s even more important for a
seller to do his research, given the contractual agreement required. But
you do have some leeway. Even if you sign a listing agreement, you
aren't necessarily obligated to sell your home. You can say no to open
houses or showings and you aren't required to sign a contract with any
buyer. This is where a seller still holds some power.
However, most listing agreements state that if the listing agent brings
an offer at the listing price and the seller doesn't accept it, the
agent is still due a commission. This scenario happens sometimes when
the listing agent and seller aren't getting along.
In most situations, if the listing agent isn't doing a good job but
thereâ€™s still time left on the agreement, you should simply tell the
agent itâ€™s not working out. A good, fair and honest agent will apologize
for not meeting your expectations and will agree to release you from
the agreement ahead of schedule. The agent doesn't have to do this, but
it would be ridiculous â€” not to mention counter productive â€” for an
agent to insist on enforcing the agreement when the client isn't happy.
It does happen, however. Usually the seller responds by no longer
agreeing to open houses or considering offers from the agent.
Sometimes, an agent wants to break up with the seller. Maybe the seller
insists on keeping the price of the home too high or isn't cooperating
to accommodate showings. The agent simply feels she canâ€™t be successful
with the seller, no matter how much time she puts into the job. Here
again, the two parties are bound by a legal agreement, which can be
terminated earlier by mutual consent. If youâ€™re a seller whose agent
wants out of the agreement because you aren't taking the necessary steps
to sell your home, itâ€™s best to let them go â€” and to give serious
consideration as to whether youâ€™re really ready to sell or not.
Brendon DeSimone is a RealtorÂ® and real estate expert
based in San Francisco and New York. He is a contributor to Zillow
Blog, has collaborated on multiple real estate books and is often quoted
by major media outlets. Follow Brendon on Twitter.
Note: The views and opinions expressed in this article are those of
the author and do not necessarily reflect the opinion or position of