The Real McCoy: Sellers find too many offers a big headacheBy: Kari McCoy, Special to Gold Country News Service
My husband and I had our home listed but it did not sell. We received 14 offers right away and it was just too overwhelming. We told our Realtor that we would probably sell next year. Then two weeks later we received a knock at our door and it was a couple that said they saw our home when it was listed with our agent. Now they are going to make an offer not using any Realtor. Our question is, do we still need to pay our former agent a commission if this particular couple buys our home?
The answer is most likely yes providing some rules and guidelines were followed. The most popular type of a listing agreement is called the “exclusive right to sell.” This gives the broker an exclusive right to earn a commission by representing the owner and bringing in a buyer. They do this directly or through another brokerage firm. The owner pays for both the listing and the selling brokers’ commission fees. In this situation, the owner cannot sell the property themselves without paying a commission, unless an exception is so noted in the original listing agreement.
With the exclusive right to sell listing contracts, there is a start date, an expiration date and a protection period after the expiration date. This protection period takes effect after the listing has expired and it is meant to protect the listing Realtor. In the event the seller enters into a contract to sell, convey, lease or otherwise transfer the property to any “Prospective Buyer” and that buyer was shown the property during the listing period either by their Realtor or by a cooperating broker, then the commission is due the former Realtor. A good tip to know is this rule only applies if the listing Realtor gives the seller the prospective buyer’s names in writing no later than three calendar days after the expiration date of the listing.
Some folks may think this is not fair, after all the listing has expired. The “Protection Period” section is in place to prevent a seller from taking advantage of a Realtor after they have spent their time and money marketing a home. It is a known fact that many times after a property has been marketed some of the buyers may not have been ready at that particular time. Later the buyers have a better circumstance and are ready to come back to the property.
Be sure to ask questions of your listing Realtor before you sign on the dotted line. She or he will make sure that you fully understand what you are agreeing to work with. It is possible that you and your Realtor will make some changes or exclusions. Remember you and your Realtor are on the same side and want the same goals, your home sold, in a timely manner and for the most amount of money. Note that not all forms are the same.
This information is believed to be accurate and it is intended to provide a general answer. For legal advice, contact your real estate attorney.
Kari McCoy owns the Kari McCoy Group, residential real estate at Lyon, and can be reached at (916) 941-9540 or e-mail firstname.lastname@example.org.