Home Buying in Northgate>Question Details

Nicole Ellio…, Home Buyer in Sacramento, CA

Are there any penalties for breaking a contract with a real estate agent when buying a house?

Asked by Nicole Elliott, Sacramento, CA Mon Aug 18, 2008

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Jim Walker’s answer
If you are writing about the purchase contract then: your contract is not with your Realtor, he is not a principal. You the buyer are a principal. Your contract is with the other principal in the transaction -
The agent is the professional who filled in the blanks on the CAR sales contract for you. The agent is an agent. You are the principal.

If there is a reason to get out of the contract with the seller that is covered by your inspection contingency during the contingency time period then your agent should either help you get out of the contract if that is what you must do. or help you to see if it makes sense to proceed with the deal. You may just have buyer jitters, cold feet,, buyers remorse. Humans are emotional, there is no shame in that. However, if you are wishing to cancel a $100,000 plus deal over some needed repair that represents a teeny tiny fraction of the value of the deal then you are being emotional. - That is okay. .
You are not Captain Spock, so it is ok that your emotion wants to be part of your real estate experience, just make sure that your logical side gets to play a part too.
0 votes Thank Flag Link Mon Aug 18, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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If only Nicole had reported back on what she did nearly five years ago . . .
0 votes Thank Flag Link Mon Mar 25, 2013
What happened? We would need to know why you have this desire prior to giving a solid answer.
0 votes Thank Flag Link Mon Mar 25, 2013
Hello Nicole. As the others have already said, what constitutes a breach of contract depends on the type of agreement you have with the agent. If there is a breach, then there can be consequences if the agent's brokerage decides to pursue their legal remedies. Why would you not try to get a written release so that you don't have to worry about later consequences? I don't understand why it's so difficult for people to communicate with their agents when there's a problem. Are we really that intimidating? I would much rather release a client by mutual agreement and know why they were not happy with my services than find out later that they just went ahead and breached the agreement.
0 votes Thank Flag Link Mon Aug 18, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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The following answers gave a comprehensive overview of the buyer's rep contract. Would you mind elaborating on why you want to cancel the contract? And what type of contract that you originally signed? If you did not sign a contract you are still obligated through the agency disclosure associated with any offer you made on a property.

Would be curious as to more specifics on your question.
Web Reference: http://www.suearcher.com
0 votes Thank Flag Link Mon Aug 18, 2008
Read your buyers rep agreement, more than likely YES if they showed you the property. You could be sued. You also need to receive an amendment to your agreement void your current contract with buyers agent. http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Mon Aug 18, 2008
It depends on what type of contract you signed. If you have signed the C.A.R. form BRE, revised 4/07, called the Buyer Representation Agreement - Exclusive, you are locked to that real estate broker (not the agent). That means you are certainly free to purchase a home through another brokerage, but you may owe that first brokerage a commission.

The contract states, when filled out properly, that you will pay the commission. However, it also says if any party other than you pays the commission, then you are relieved of that obligation. Therefore, if you buy a home through the brokerage you originally signed the contract with and the seller pays the commission, which sellers do 99.9% of the time, you will not owe a commission.

These contracts are bilateral, so you are prohibited from unilaterally canceling the contract.

If you no longer wish to work with the designated real estate agent, you might want to ask the agent's broker to assign you to another real estate agent. You can also ask that agent if he / she will release you from the contract as well. Sometimes, agents will.
0 votes Thank Flag Link Mon Aug 18, 2008
that depends on what your contract reads. if it is a buyer broker contract it should have a clause that states what happens if the contract is broken, if they helped you find that house, you break the contract and you buy that house, i would say yes you would be responsible.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Aug 18, 2008
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