Home Selling in Kansas City>Question Details

Flows, Home Seller in Kansas City, MO

What is the penalty for breaking an Exclusive Right to Sell Contract?

Asked by Flows, Kansas City, MO Wed Jan 7, 2009

We're having major issues with our realtor and are considering finding a new agent. We did sign an Exclusive Right to Sell Contract but she wrote 4/2008 instead of 4/2009 as the end date and we're hoping we can use that as our loophole. If we can't and just need to break it - what is the penalty?

I won't go into details, but the agent is not performing her duties. We've had one showing in 2 1/2 months and that was because the man drove by and saw the house - not because she was promoting the house. Anytime we suggest things (like a broker open house) she gets very defensive and gets short with us. We are moving due to a job change and HAVE to sell by April. We need an agent that's willing to help us out!

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OK, I'm a Missouri Realtor, but not a Kansas City realtor. Each Brokerage is different with how they handle it. Your contract is with the brokerage, not the agent. Here, if someone wants to break a contract with me, they have to tell me and the broker in writing. The broker is the one who actually has to acknowledge it legally, but in reality it's the agent who typically handles it. Here, some brokerages are very good about it - you want out, you are out. While there are a few who will hold you to your contract, the date might let you out (talk to a lawyer). Another agent CANNOT legally contact you about your listing while you are listed with someone else, but YOU can legally contact another agent, if you contact them, they can discuss with you.

NOW, Please, I know you are unhappy with your agent & your agent is probably very frustrated right now as well. I know the conversation will probably be very difficult on both sides, but I would suggest that before you cancel the listing you ask to sit down with the agent & the agent's broker & discuss what is going on. Why isn't your home being shown, what marketing is being done & why. What can be fixed - staging, price, painting, minor repairs, major repairs, small renovations. What can't be fixed & you have to adjust the price instead to compensate (lousy yard, busy street, bad neighborhood, etc)

You mention open houses - do you know the stats for open houses & why they are done? Let me tell you - less than 3% of buyers will see a home for the first time at a open house. Out of those, less than 1% will never see the home at all if it weren't for the open - the others came because their agent was holding open a house & sent them out to look at homes by themselves to cut down on the homes that she will be driving them to later on. The main reason why agents do open houses is to find buyers who don't yet have agents so that they can meet them & hopefully become their agent. Open houses also bring out other potential sellers who are shopping for agents to market their homes, so the agents are marketing to potential sellers. I have sold homes at open houses, but it is rare.

Agent open houses are more important - here your house needs to shine even more than at an open house, since the agents control the real buyers who are prequalified and actively looking at the market. If your agent is marketing to the other agents, then she is marketing to the right people - they need to see your home and know about it so when they have a buyer who is a match, they know where to bring them.

Is your agent marketing on line? The first showing of a home is on line - not physically at the home any more. Are there a lot of pictures on line? Was your home really clean and ready when the pictures were taken? If not redo the pics. If the pictures don't entice them to come visit the home, then why? Ask someone you know and trust who knows you but isn't afraid to hurt your feelings, to look at the pictures and honestly tell you if the pictures look like your home or not and if they do, what do you need to do to your home to fix it up before the pics are retaken. Do you need to hire a stager to stage the home (with your own stuff or with her stuff) to enhance your home so it looks better on line. Your home has to be the beauty queen to win the pageant & bring home the buyer, not what the cat dragged in - it has to gleam inside & out - every bit of glass in the home needs to shine, the floors need to sparkle &the carpets clean, the bathrooms & kitchen need to be extremely clean. Toys put away. The home has to have warmth and charm, but it can't be so about you that they can't see the home for your stuff.

Now, is your home priced correctly for the market - not based on what you need to get out of it, but for today's market. I'm sorry,but what you need to get out of the home, may not be where the buyer and the buyer's agent are seeing the home based on value. If it's not, that may be why you aren't seeing anyone coming to visit your home. How does your home compare to it's competition? Are you driving the buyers to the competition's door? Ask your agent to take you to visit the competition - then figure out how you can beat them - by fixing up your home (paint, stage, repairs) or by improving your price point.

Last, don't penalize the agent if the problem is something she can't fix - I had one that was 107 years old - lovely, updated - problem was nothing over 64 years old had sold in over a year in that area. Another was on a street that was perceived as very busy - those take special buyers and those take time to find regardless of how much marketing you do - I did tv, newspaper, open houses, agent opens, lots of internet, and much more - spent a ton of my own money to market them - and I don't get paid unless it sells so if the listing expires or is pulled I'm just out the money. So the agent has a vested interest in getting the home sold
Web Reference: http://www.YourSTLHome.com
2 votes Thank Flag Link Thu Jan 8, 2009
Hi Flows,

I am not an attorney nor am I licenced in Missouri; however, I am doubtful that you will obtain a specific answer to your contract from a licensed agent or Realtor (for a variety of reasons). First, it is against Realtor code of ethics and real estate law in most states for an agent or Realtor to entice someone to break a contract. Secondly, because the laws vary from state to state as does the specific language contained in the listing forms or Exclusive Right to Sell Agreement, it would be difficult for someone to comment/interpret your agreement without reading the provisions contained therein.

I would suggest that you speak with your agent's managing broker, explain your situation and issues that you may be experiencing with your agent. See if you can peacefully come up with a solution that you are satisfied with. If not, I would recommend that you speak to a real estate attorney. The cost of a half hour's worth of legal advice will likely far outweigh taking on additional stress & frustration from doing nothing. Best wishes - Ted
2 votes Thank Flag Link Thu Jan 8, 2009
TED SHOOP, Real Estate Pro in Buford, GA
MVP'08
Contact
Flows -
Dale really layed it out well for you and I do hope you move forward talking with your agent and her broker today. Express your concerns and give her the opportunity to show what she has done to promote your listing. There way have been more done than you know. Having said that, if you've been on the last 2 1/2 months, that's some of the slowest time of the year. We're the largest brokerage in Columbia and our showing log was averaging 8-12 showings a day for some portions of that period (November-December). That is pitiful and reflects the lethargy of the market as a whole. Just this last week things have really picked up but still not stellar. Without knowing your property it's hard to go further (maybe you have one that's difficult to market - see Dale's post) but call your agent today and get the ball rolling to get your feelings in the open. She can't fix something of which she's not aware and might not know the extent of your dissatisfaction. Good luck and hope these posts help.
Trisha Lee REMAX Boone Realty, Columbia, MO
Web Reference: http://www.TalkToTrisha.com
1 vote Thank Flag Link Thu Jan 8, 2009
Thumbs up,Dale! Great answer!
1 vote Thank Flag Link Thu Jan 8, 2009
i am in Louisiana,not Missouri,so of course,I am not familiar with the way things work in your state. however,it seems to me that the cleanest solution would be to ask the broker to get you another agent in the same firm. Your contract is most likely with the brokerage & not with the individual agent. At least that's the way it's done here.The broker needs to know when an agent is not doing her job.
1 vote Thank Flag Link Thu Jan 8, 2009
Flows, you have been given some excellent suggestions. I am of the opinion that you meet with your agent first. Ask her to bring the information outlined below to the meeting. She should be able to tell you why you aren't getting any showings. Location cannot be changed. Condition of the property, staging, price and advertising can. If the meeting with your realtor does not go well, certainly involve her broker immediately.

What kind of feedback did the man give your agent after she showed him the house?

Since you have had only 1 showing, perhaps a Broker's Open with Price Opinion would be helpful. This is something that many of us do to get many different opinions on price and condition in a short amount of time. Usually, we offer lunch and a gas card or drawing to entice more agents to come. This will help you tremendously when reformulating your plan of action to get the house sold. Coming up with the plan is the agents' job but we rely upon our sellers to listen to our advice and follow through on repairs, maintenance issues, flexibility in showing times and staging in a timely manner.

Best wishes for your meeting. I hope that all goes well and you can get your house sold quickly.
0 votes Thank Flag Link Wed Jan 14, 2009
Things that you need to know before you make any decision are:
What is the absorption rate in your neighborhood? that is the number of homes that sell in a year, divided by 12 to find the number that sell per month. Then look at how many are on the market now to determine what your supply of homes on the market is - is it a 1 month supply or a 12 month supply? Look not just at your subdivision, but at your school district and the overall area that a buyer would be looking at. (Very few buyers will only look at one subdivision, but many will limit themselves to one or two school districts). Then look at how many homes have actually gone under contract in the past 2 1/2 months in those areas. (Here in St Louis, the past few months have been pretty slow - things have started to pick up again, but it's been a very slow winter). Next take a strong look at what the homes that went under contract really looked like - were they foreclosures and short sales or others where buyers got really great deals or were they really fabulous homes in great condition, great locations with great amenities at good prices? Now seriously look at how your home stacks up to those that went under contract (if some haven't closed and will still let you look, tour them). Next tour your current competition to see how you stack up against them. Then look at your on line marketing to see what it is like (that's your home's first showing). It's great to say that you have to sell by X date, but if the absorption rate is 1 home sells every 3 months in your area and there are 15 homes on the market already, that's 15 homes that you've got to beat out, plus any others that will be coming on the market. If all the other homes have finished walkout basements and updated kitchens and yours is unfinished with an original 25 year old kitchen, then it's going to be really hard to compete since most buyers both work and don't have time to take off work to deal with contractors and really don't want to put sweat equity into a home if they can buy it already done for the same price.
Web Reference: http://www.YourSTLHome.com
0 votes Thank Flag Link Sat Jan 10, 2009
You can "fire" your agent if you are unhappy with the service you are getting. (In fact, your listing agreement probably states this.) Put in writing that you would like to cease your relationship immediately. Hand deliver it as well as send a copy via fax. You may also want to give a copy to the agent's manager. Keep in mind, if a buyer appears that was a direct result of the agent's efforts and you enter into a ratified contract with that buyer you may still owe the agent a commission.
Web Reference: http://www.robynporter.com
0 votes Thank Flag Link Sat Jan 10, 2009
Flows
I suggest that you ask her to meet with you and discuss the progress on the sale of your home.

You hired her to sell your home, not have a listing.
Ask her to bring the following to your meeting:
Since your home hit the market, a list of similar homes that have:
Come onto the market
lowered their price
Gone into escrow
Sold
Expired.

Ask her to identify the top six to 12 homes homes that are competing with yours. Ask her to show you how your home stacks up.

Then explain to her that you hired her to sell your home. From the data that she will provide you will see that the problem is not that homes are not selling. The problem is that YOUR home is not selling. Explain to her that because other homes are selling, and your is not, that you are beginning to wonder why?

Then I would simply explain to her that you need to sell in order to move to your new job and ask her what she is going to do get your home sold. Listen to her.

Then give her two weeks to either get it sold (that means doing what she recommends...price reductions, staging, etc.). If she unable to sell it in two weeks (we know that properly priced and marketed homes should receive 10-12 showings or one offer in the first two weeks, our goal is to sell in the first 30 days because we will get the best sale price to asking price ratio. In my market at 30 days it's 98.6%, versus 90.6% at 120 days.

She (IMHO) should ask you to re-launch the listing - clean, paint, declutter, re-stage, take new pictures, re-price (5% price reduction) have a Sunday football open house with grilled hot dogs.

Good luck.
0 votes Thank Flag Link Sat Jan 10, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Flows,

The terms should be in your contract if your agent used the standard KCRAR forms. Read it carefully or have an lawyer look at it for you.


The truth is that it is a tough market in KC but there are some price points and communities here that are doing well. Broker opens are worthless. Brokers use them to expose rookie agents to housing inventory. It is more for education than marketing your property but sellers like them because they can actually see the action... even if the action is worthless.

Call your agent and askto know what they are doing to market your property. If all they are doing is waiting, demand some actual marketing.

If you have a good agent, you will learn that they are working hard to sell your property but that the action is of the nature that you cant actually see it. Does that make sense?

Good luck!

David Nichols
Web Reference: http://www.mykchometeam.com
0 votes Thank Flag Link Sat Jan 10, 2009
The previous answers should be a good example of what Trulia should be all about. Great answers, totally professional, with no overt solicitation. Along with her answer I gave Dana a thumbs up for giving Dale a thumbs up. lol

Flows,
I am all about being proactive with your agent when you use one. The link below is to my FSBO blog. Given your time constraints, I would not consider it. However, in the blog there are some marketing ideas that you could possibly do to supplement your agent's efforts. If you choose to do any, please advise your agent first and use the agent as the contact person. Good luck. BTW, being a Cardinals fan, I've hated KC since 1985. Did you send Denkinger a Christmas present? BOOO!!!!

http://www.trulia.com/blog/rockinblu/2008/08/thinking_about_…
0 votes Thank Flag Link Thu Jan 8, 2009
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