My colleagues have spoken well, as you are asking a legal question to an audience that reviews legal documents all day long but yet cannot dispense legal advice. That said, you obviously know that your best way to answer your own question is to have a real estate attorney look over your contract. That will cost money, but you can also just sit down with your broker and ask them to look at the contract. They can't tell you any stories; they will report the facts.
If you don't want to continue, just treat this as you would want to be treated. Be nice. Sit down with your agent and their manager. Tell them that you have decided not to pursue another property. They may or may not want to cancel the agreement, but most likely would. Then, I would recommend offering something to the broker and agent as a "thank you" for their time. They may have showed you one house and spent a total of 5 hours on this one deal, or maybe you dragged them around for months and saw 30 homes and placed 5 offers, resulting in 60-80 hours worth of their time. Just be considerate and offer something to compansate them.
I have had very few clients every cancel their contracts with me. And I am happy for that. But the few times it has happened, my clients have been very kind and dropped off a check for my broker for $500 or $2000 to compensate me/us for the time spent. In fact, just this morning, I called a client that just lost her home to a foreclosure. She had called me with only 6 weeks left in the redemption period asking me to try to do a short sale. Unfortunately, some idiot (who was apparently a real estate agent) told her that once you have a sheriff sale that you can no longer sell the home. That is, until she got a job working for one of my past clients. I tried to sell it quick, but failed. I knew it would be a miracle, but it was way too late. Anyway, she sent over a check to my broker for $2000, which they split with me, to thank me for all of my hard work and time. The call this morning was wonderful and I just thanked her for being so kind and understanding. I told her that this meant a lot to me and I hoped that down the road a few years that I can find her a home again. So we have a great friendship going and we both care about each other. And that is what matters.
So be good to your real estate agent that put in the time!
As all have said, you should check with your Buyer's Rep Contracts and see what it says regarding discontinuing your contract. If your contract is similar to most in MN, you likely have no further obligation if you choose not to make a purchase at this time.
HOWEVER, your agent, upon the contract being cancelled, will have 72 hours to render a "protected property" list to you. It will be a list of homes that s/he has shown you or that you have made an affirmative showing of interest in. If you purchase one of the homes on the Proctected list within the specified timeframe, you typically will owe the broker a commission.
The details of this should be clearly spelled out (and easily found) in the COMPENSATION section of the Contract for Exclusive Right to Represent Buyer. If this portion of the contract does not make sense to you or you have detailed questions, please let me know and I will put you in touch with a real estate attorney that my clients often turn to with legal questions.
If you would like additional information, please feel free to reach me at email@example.com
From what you described above, No. Read your contract where it talks about payments and commissions. If there is nothing there about cash retainers or upfront payment, you are done. I would also send the agent an e-mail or letter saying this and Thanking them for their help as well because after all it's just plain old nice!
But you might want to let the agent know that you appreciated all the help and would be happy to recommend his/her services to others. Referrals are the lifeblood of the real estate business.
Steele V. Propp
Bank Owned Homes Division
Schatz Real Estate Group
Buying foreclosures can be a frustrating process for both the buyer and their agent. Buyers are hearing so much that it is a buyer's market that they believe that the owner bank will take very low offers, and are very disappointed when their offer is refused. Some of my clients have gotten incredible offers approved, but it isn't always the case. This market is still full of opportunities, don't give up so easily.
Just wondering, why don't you ask your agent about this? Did your relationship with the agent end badly? I speak in GENERAL terms here, but USUALLY, you don't owe any money unless your alliance with the agent results in a successful closing on a transaction. BUT, if you agreed to a retainer fee, you could owe that. OR, if you cancel the contract and THEN move forward on a house the agent has already shown you, you also could owe the full commission.
I would say if you CAN'T check with your agent for some reason, consult a real estate attorney as all of these contracts could have some different terms filled in the blank spaces. All agents fill in those spaces a little differently.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors