Total Records AvailableForeclosure Articles
Question: We listed our home with a local real estate broker for a period of 90 days. The listing period ended several months ago, we have not relisted the property with any other broker and some prospects who saw the property with the listing broker have now come back and expressed interest in buying. Will we owe the broker a commission if these people go ahead and purchase the property?
Answer: All listing agreements must have a termination point. Let's imagine that you had a 90-day listing. And let's also imagine that during the listing period the Smiths came by the property with the broker. While the Smiths like the house they were not ready, willing and able to buy the property.
At this point it's very clear that the broker “introduced” the Smiths to the property. The broker had the right to show the property because of a listing agreement and the Smiths were attracted to the property through the broker's marketing efforts.
But the Smiths didn't buy and the listing agreement came to an end without a transaction. We then have the question of what happens if the Smiths come back after the listing period. Does the broker have any residual rights to a commission if the Smiths wind up buying the property?
As we said, all listings must have a termination point. In addition, most listings establish what can be called a “protection” period. A protection clause typically says the broker is entitled to a commission if any buyers who saw the property, made an offer or made an inquiry about the property during the listing period return and purchase the home by a certain date.
Just like the original listing agreement there has to be a termination point to the protection period. The length of the protection period is a negotiable matter between the seller and the broker.
The purpose of the protection clause is to assure that the broker is fairly compensated for his or her work during the listing period.
However, there is another issue of fairness to consider. While we don't want the broker to be deprived of a fairly earned commission, we also don't want sellers to face the prospect of somehow owing two commissions. For this reason, the protection period must automatically end if the property is re-listed with another broker.
For details and specifics regarding protection periods speak with local real estate brokers and carefully read any proposed listing agreement. You can also get assistance from an attorney or legal clinic.
Peter G. Miller is author of "The Common-Sense Mortgage," (Kindle 2016). Have a question? Please write to email@example.com.View Foreclosure Article Archives
All content copyright © 1997 -
2017 by Record Information Services, Inc.
This Page Powered by: Record Information Services