Expert: Karyn Foley - 7/15/2008

Question
Hi Karyn,

I found this provision in my listing agreement.

2. To pay a Brokerage fee subject to the terms contained herein if this property is sold, gifted or exchanged by Broker, Seller or any other person during the term of this Agreement; if the property is optioned during the term of this Agreement and the option is subsequently exercised; if the property is leased during the term of the Agreement and Lessee subsequently purchases the property; or if the property is sold/leased directly or indirectly within six (6) months (Protection Period) after termination of this Agreement to a Buyer to whom it was offered during the listing term. However, seller shall not be obligated to pay such fee if another valid listing agreement is entered into during the term of said Protection Period. The provision of this section shall survive the termination of this Agreement.

My question is: If I have another valid listing agreement after the current one expires, the commission will go to the new listing agent, not the first one. Right? Thanks!

Answer
Dear Yan:  As I am not an attorney, I am not going to give a legal perspective to your contrat terms.  To do this, you need to go to an attorney.  Generally and informally speaking, you should not enter into any other listing agreement until or after your present one expires.  You do not want to owe two commissions. I do see one thing to which I am not comfortable, and that is the "protection period".  Your present listing agent is deserving of that clause, but it should be carefully explained to you and what it means, and then have the tie periods changed to a more reasonable amount of time.  Instead of six months after termination, it should be 60 days, or 90 the most, depending on the state of the market.  Also,and this is paramount and will keep problems to a minimum, any and all names of people who say the property during the present listing agents tenure, should be presented to you in writing - IN WRITING - so that there is no confusion as to who really saw the property and with what agent. Copies of names belong to their agent should also be sent to that particular agent notifying the agent that should the buyer to whom they showed your property during the listing agent's tenure is registered with the owner/seller!  This way, in case their client wishes to purchase during the protection period, the agent calls the present (original) listing agent instead of making a mistake and calling the new agent which causes hassles galore and could end up costing you a sale. Make sure these changes are signed off by, or initialed by, you and your agent.  Nothing in real estate should be verbal, as written terms only not verbal prevails.  Verbal agreements are seldomed "remembered" or honored.  Good luck, KARYN