How Do You Cancel a Listing Contract With a Realtor?
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Real estate agents make the process of selling your home much easier than doing it yourself by handling all the advertising and paperwork, not to mention negotiating the price with potential buyers. They let you step away from the work, and in return, take a small cut of the sale price.
But what if you want to cancel your listing contract so that you can hire another realtor or perhaps handle the sale on your own? Here’s how to go about it.
Determine whether you want to cancel a listing contract with your realtor or with your broker
The first thing you need to do when canceling a listing contract with a realtor is determine whether you want to stay with the broker or not. Most realtors are simply employees for larger brokerages. There are some exceptions, such as independent realtors, or realtors who also own their broker, so be sure to check and see what your realtor’s situation is. But in most cases, your realtor is probably an employee of a broker.
If that’s the case, then you actually have a contract with the broker, not the realtor, and the broker is the one you are legally tied to. If you’re fine with your broker, and merely want to change realtors, then approach the broker and let them know what the situation is. They won’t want to lose your business, so they’ll likely work with you to find another realtor at the brokerage who fits your needs and can address your concerns.
If you go this route, you probably won’t even need to cancel the listing contract, because the contract should be with the broker rather than the realtor.
Contact your realtor and ask for a release
However, if you want to move on from the broker as well, or if your realtor is working independently, it’s vital that your next step is to contact your realtor and let them know that you want out. You need to do this before you hire a new realtor. If you enter a contract with a realtor when you already have an existing contract, you could end up in a lot of legal trouble, and that’s the last thing you want when you’re trying to sell a home.
Instead, put a new realtor on the backburner and focus on your current one. Let them know that you want to cancel the listing contract, and ask them what the steps are. It will likely involve paperwork to legally end the contract.
Proceed with a new realtor and pay any potential fees
Once you’ve canceled your contract, you can proceed with a new realtor. However, you may not be done with your old realtor just yet. Most brokerages have penalties for breaking contracts, and that’s especially true if you’ve already agreed to a price with a buyer.
When you’re talking with your old realtor, they’ll let you know what the penalties are, including any fees you have to pay. Some of those fees may be payable up front, but some may be based on the sale price of the home, in which case you’ll have to wait until you’ve sold the home to make the penalty payment.